Lease Option vs. Lease Purchase

January 15, 2008

Phoenix and Scottsdale area lenders are tightening their lending practices. It is increasingly more and more difficult for home buyers to get loans.lease-option.jpg

Now 100% loans, or ‘majority financing‘ is a very limited option, buyers and sellers have to be creative to get real estate transaction closed.

There are 2 strategies that may work; The Lease-option and the Lease Purchase.

A common name you may here these referred to is “Rent-to-Own” .

I have to recommend that you do not attempt this without the advice of an experienced attorney and/or real estate professional.

Lease option - “contract in which an owner leases her house (usually for one to five years) to a tenant for a specific monthly rent, and which gives the tenant the right to buy the house at the end of the lease period for a price established in advance”

Lease Purchase - “a Lease to Purchase contract combines a basic lease contract with an option to purchase contract, which creates a Lease to Purchase contract.” The main difference being that the lease purchase contract, the Buyer is obligated to buy; if not, the buyer would likely be in breach.

Again, both contracts can provide language where a portion or all of the rent payments can go towards the purchase of the home. Thus, allowing the buyer to accumulate down payment to more easily obtain a loan.

Hire a real estate attorney or experienced real estate professionals who can prepare documents, explain and protect your interests.

Here are the names of a few real estate professionals with whom you can speak.

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Copyright © 2008 By James Wexler, All Rights Reserved. *Lease Option vs. Lease Purchase*

Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.

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Written by James Wexler · Filed Under Articles, Buyers, Sellers 

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