Posted on: 25th Aug, 2010 07:49 am
i was told that i was leasing a house and that the house will be title in my name and it will be if i am buying please explain to me how a lease purchase work.
Hi cpecio,
In a lease purchase option, the buyer pays the option money to the seller to purchase the property. The buyer and the seller will have to agree on a purchase price which might be higher than market value.
The buyer leases the property from the seller for a rental amount. However, the term of the lease purchase agreement is negotiable. It should be noted that option money does not apply toward the down payment. The monthly lease payment typically applies toward the purchase price.
Nobody else can buy the property unless the buyer defaults on the payments. Apart from this, the buyers are also responsible for maintaining the property including taxes and insurance. Also, the buyer is obligated to buy the property.
It is always better to hire a real estate lawyer to draw the documents related to the lease purchase.
Take care
In a lease purchase option, the buyer pays the option money to the seller to purchase the property. The buyer and the seller will have to agree on a purchase price which might be higher than market value.
The buyer leases the property from the seller for a rental amount. However, the term of the lease purchase agreement is negotiable. It should be noted that option money does not apply toward the down payment. The monthly lease payment typically applies toward the purchase price.
Nobody else can buy the property unless the buyer defaults on the payments. Apart from this, the buyers are also responsible for maintaining the property including taxes and insurance. Also, the buyer is obligated to buy the property.
It is always better to hire a real estate lawyer to draw the documents related to the lease purchase.
Take care