RentToOwn-HouseFinder.com - wanting do buy a home using a lease option?

wanting do buy a home using a lease option?

I am looking into a lease option here in oregon since I do not have the income documentation to secure a home loan and was wondering what the best approach to this was? What's the best way to find sellers will to carry the contract? What kind of terms are negotiable? pros and cons?

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There really is no good way, other than maybe Craigslist. Everything is negotiable...it is just up to the seller if he will accept the terms or not. The major con is that the seller can change their mind and unless you have an airtight agreement, you may lose everything you thought that you had saved towards the house.
You may have some mis conceptions about lease options and lease purchases. The seller doesn't "carry the contract." In a lease option you are renting property with the option of purchasing by a date certain. In a lease purchase, you are still renting but you are required to purchase by a date certain and may require a substantial up front deposit. In both cases the purchase price is pre-determined and actually a copy of the purchase contract should be attached to the lease. Also, usually a portion of the rent is applied towards the purchase price. There is no seller financing involved. You must obtain financing from conventional sources. The question for you to answer is will you have the income when the lease terminates to qualify for a loan? If you don't have the aid of a Realtor, make sure you have an attorney to help you structure the proper documents. Realtor.sailor realtor.sailor
Upfront comment: These transactions do not usually work out. There are several ways this type of transaction can be structured. Where I live, a lawyer should always draw up the paperwork. As a REALTOR, I am not allowed to do it. It would constitute practicing law since we do not have any standard contract forms for lease/purchase or lease/option. The lease option is typically a lease that states you have an option to purchase the property by XX/XX/XXXX. You would pay rent to the owner during the lease portion of the option. There is usually a time limit for you to exercise this purchase option and usually an option fee that would be substantial. The option fee would be used to help defray your costs when you exercise your option to buy. If you do NOT buy, then some or all of the option fee would be retained by the owner. During a lease option generally no portion of your rent will be credited to your purchase of the property. The owner cannot accept another offer to buy the property. But all terms are negotiable. Lease Purchase is different. Usually you pay an increased rental amount and a portion of that rent is retained and credited to your purchase of the property. There is a contract that states the sales price and terms of the sale, including the date by which you will either complete the sale or go on as a renter (or move out). Now, if the owner does not have a mortgage on the house, s/he may be willing to Owner finance your purchase. But, I wouldn't expect to find someone willing to do a 30 year mortgage. Maybe 15, but probably more like 6 to 10 years. Interest rate on owner financed purchases is usually higher than bank rates for mortgage loans. Typically, though, you will need to get a mortgage loan to complete the purchase at the end of your option period. Most typically I've seen a 1 year option. I think the reason many of these deals fall apart is because the buyer is not credit worthy and 1 year is not enough time to get the credit/income issues straightened out and get a loan. As noted before ALL terms and conditions are negotiable, so you should check with a local real estate legal adviser to help you determine if lease/option or lease/purchase are options for you. Your legal adviser should be able to help you sort through the details such as property taxes - who pays and accounting to the "other" party. Payment of existing lien(s) - if any - who pays and accounting to the "other" party. Repairs/Improvements - who pays what and how is the cost accounted for in the "sale" portion of the agreement. Etc. Lots of details to attend to, get someone experienced and detail oriented. As for finding a property that works for your needs that will do a lease/option-lease/purchase, you might want to look for a real estate agent. They can see the properties that are for sale and for lease - these may be the best way to find a seller who might be interested. Good luck.
Good answers from realtor and A D. There are plenty of ways to find people willing to do lease-options. Not a plug--I'm not supplying a link or URL here--but I recently wrote an e-book on "How To Buy A Home With No New Mortgage," and the largest chapter was on lease-options. I listed 10 ways to find a lease-option; there are plenty more, but I figured 10 would be enough. Among them: Use a Realtor to search the MLS for lease-options; use a Realtor to search the MLS for listings that appear both under "rentals" and "sales," search Craigslist for lease-options, call people who are leasing their homes and ask if they'd be willing to lease with an option to purchase, and more. Regarding Craigslist, I just did a search in Oregon (Portland). Here's the link: http://portland.craigslist.org/search/rea?query=option&minAsk=min&maxAsk=max&bedrooms= Here are a few I came up with: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Mar 31 - 3br - Great Location... "Lease Option Available" 3bd/2ba + Den - (Tualatin ) pic <<real estate - by broker Mar 31 - $1495 / 2br - ***Owner Financing Available*** - (SE Portland, Reed District) pic <<real estate - by owner Mar 31 - $1700 / 4br - 2bath ******* 2100sqft ************** $1000 - RENT CREDIT EACH MONTH - (NE portland - Lease OPTION) img <<real estate - by owner Mar 31 - $1595 / 3br - NICE 3 BEDROOM HOME for LEASE/OPTION - (Milwaukie) pic <<real estate - by owner Mar 31 - $120000 / 2br - Lease option or rent - (Longview) pic <<real estate - by owner ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ That's just a few of them. What's negotiable? Everything. Absolutely everything: Purchase price, length of option, amount of lease payment credited toward purchase price, responsibility for repairs, and on and on. If you want to find sellers willing to "carry the contract," then you're looking for a "contract for deed," a wrap mortgage, or just private financing. Hope that helps.