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Is Lease Purchase a good option for us?
We owned our own business and bought a big house. Then the business went under and we're having to sell our dream home. I got a job making only 30K a year and hubby is still looking. We're living on savings right now. I'm thinking the best option is to rent a house for a few months and then buy one. However, we're trying to avoid moving twice because of my daughter that is going into the 2nd grade. I am finding something I've never heard of before called Lease Purchase here in Texas. What are the pros and cons of that?
Public Comments
- I'm a Realtor in Houston and I, coincidently, am closing on 2 rentals today. Basically, the way lease/purchase works is you lease the house for whatever amount and you and the owner/landlord set an agreed upon percentage of the rent that will go toward purchase if you should to later on decide to purchase the house. So, on a 12 month lease, if you are paying (just an example) $1000 a month, you can make a deal that 10-20%, or $100-200, per month will go toward the price of the house. Over a year that would be $1200-2400 applied toward the purchase price. Again, this is all just hypethetical. I don't advise lease/purchase to my clients. Once you're in there and all settled in- you have much less leverage when it comes to negotiating a good purchase price than if you didn't live there. Also, if you're going to lease make sure that the landlord doesn't still have the house listed on the MLS. Some owners will continue to show the house to potential buyers even though there are tenants- and you do not want that kind of inconvenience or disruption in your home. I saw your other post and I feel for you and your situation. I hope you find somewhere nice to live!
- Do not lease purchase. It could be an honest deal but you have no way of knowing until to late! The owner could quit making house payments to his mortgage company or quit paying the property taxes and you would lose your house with no warning. The house might have major title problems that can't be cleared up and you could lose your house. The contact that you sign and the deposit you put up are controlled by the seller-not you and are always to the sellers favor. Rent for now-the payments will be lower. Save money for down payment and pay off back debts to increase your credit rating. When you buy on the "real" market you will have your pick of hundreds of homes instead of just those "rent to own".
- I agree whole heartedly with what the two answers above mine, but also consider the fact why is the landlord offering a lease option? There has to be a reason why it didn't sell the first time around and now the home is being offered w/ the lease option to draw in more prospects. That's what I've discovered from my days as an agent. I personally would rent for awhile and tuck away the money you're saving into a bank account, then use it for a down payment on a house of your own. I hope things get better for you and your family!
