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Are "lease with an option to buy" traps?
want to rent a condo... and the owners are offering lease with an option to buy. is that a way to get me trapped or are these type of agreements legit?
Public Comments
- These agreements are incredibly legit, and a lot of people who have questionable credit use this option as a way to purchase a home. The downside, it sometimes costs mmore than if you were able to just purchase the condo outright so if you have good credit then try to get a loan from a bank. It's also possible that if your credit is that bad, you'll never be qualified for a loan and never able to purchase the house. You'll want to read the fine print. Like anything financial, tread carefully. More info here: http://www.realestateabc.com/answers/option.htm
- No, it is not a trap. It just means that you are leasing the car and when your 3 yrs is up if you want to keep the car you have that option to buy it out. That is all.
- they are ligit. if after the lease is up the owner is going to give you the option to buy for a resonable price!
- It all depends on the terms and enforceability of the contract. Get everything in writing, and read before you sign the dotted line -- if it seems unreasonable to you, or if you feel pressured, don't do it. If you're not sure, have someone you trust look it over first. If they're on the up and up, they shouldn't need to pressure you to sign with nobody else looking it over.
- You would just want to have it specifically in writing that you intend to buy the condo after a certain amount of time. You'll also want to make sure that rent you pay is going toward the purchase of the house.
- Don't know about the condo's, but I sure wish getting married had the same clause built into it,, only in this particular case, it should be designed to read: "Try it BEFORE you buy it"
- They are legitimate for the most part. One marketing tactic of a motivated seller is to offer that type of lease. They are trying to sell not rent although they will usually settle for either. The only "traps" I would worry about are usually from professional promoters not from individuals. If you are renting and not interested in buying make sure the monthly rent is reasonable and that there is no up front nonrefundable fee associated with the lease. Make sure the people you are dealing with are aware of your intent.
- Yes, it is legit. I am a licensed mortgage broker and you may contact me to learn about leasing w/ the option to buy.
- Yes, you can buy this way, but I highly recommend that you have an attorney draw up the agreement. You want an agreement that covers such issues as how much down payment, how much of the monthly rent goes toward the purchase, how will the price be determined and when will the purchase take place? Is the owner going to hold the mortgage or will you have to secure financing? There are a lot of issues that have to be put down on paper for your protection and for the protection of the current owner.
- you still have to be able to qualify for a mortgage on your own within a certain time frame or you would lose all the extra money going towards the downpayment
- NO! Lease options are awesome! They are great tools for those who are looking to improve their credit AND grow in wealth through home ownership. AND A lease purchase agreement is great for landlords because they get a tenant who WANTS to keep the house. A win-win situation. Most likely, you will agree to some purchase price down the road (1yr) and the seller will agree to put some $ from your rent to credit to your closing costs then. Often there is some arrangement for you to fix credit so you CAN buy the house! If you don't want to buy the house, you don't have to exercise the option. I know of one person who signed a lease purchase agreement with a set $ price at the end. After 12 months she bought the house at the agreed price, but the house was worth $80K more!! She walked into $80k in equity by just making her rent payments! That is a great deal, and you will find one too! Best of luck!
