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How does the Lease Option lease-to-own
system work?
"Lease-option" describes the process whereby you are promising to
buy a particular piece of property within a certain time-frame, generally at
a price determined beforehand. The process for determining the future price
is agreed to between the buyer and seller and will be implemented at some future
date. An example is where a future price will be determined by an independent,
licensed real estate appraiser, paid for by either party or jointly, before
the expiration of the lease period.
Earnest Money
"What does it cost to get into a home under a lease-to-own program?"
Under either program there is an initial payment of money to the seller ("earnest
money" or, under a lease option, "option consideration"), usually
in an amount greater than the normal security deposit and may be in lieu of
a security deposit. Option consideration is not refundable if you don’t
exercise the option to buy - remember, you're buying the right to buy the house.
It is considered part of the down payment if you buy and close on the property.
Earnest money, under a lease-option may or may not be refundable (usually
not) if you fail to qualify for financing or are otherwise not able to buy the
home during the course of the lease. Earnest money is also considered to be
part of the down payment that may be required by the seller or lender at closing.
Lease Option is a great way to purchase a home. Here are the Buyer Benefits you'll enjoy:
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FASTER HOME EQUITY GROWTH.
Your home equity can accumulate faster than with conventional financing. |
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YOUR RENT IS BECOMING YOUR DOWN PAYMENT.
If agreed upon, each month you pay rent, many times a portion is credited
toward your down payment or it can come off the sales price. |
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MINIMUM 'OUT-OF-POCKET' CASH.
When you purchase a home using conventional financing you must also pay
such items as: Closing costs, prepaids (taxes, insurance, etc.) AND a down
payment. |
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USUALLY ANY CLOSING COSTS WILL BE PAID BY THE
SELLER OR ADDED INTO THE LOAN AMOUNT.
Since you have given the seller or landlord a down payment AND a substantial
amount of your monthly rent has been credited toward the purchase, usually
there is very little or NOTHING that you'll have to come up with for a down
payment at closing |
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YOU HAVE MORE BUYING POWER WITH THE LEASE OPTION.
You can lease option a home for as little as the first month's rent and
a down payment. You can compare that to a conventional lender that will
require 5-20% down PLUS closing costs and prepaids! |
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CREDIT PROBLEMS ARE A-O-K.
Restrictions on qualifying for a lease option ARE NOT as strict as in
conventional home financing. Therefore, your seller or landlord has complete
discretion on what they will accept. |
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LEGAL CONTROL OF THE HOME.
In a lease option you have LEGAL CONTROL over the property during the
contract period without having to actually OWN the property. |
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MAXIMUM LEVERAGE WITH MINIMUM OUTLAY.
Your real investment (cash) is substantially lower than conventional financing
WHILE you have LEGAL CONTROL over perhaps the largest investment in your
lifetime. |
We have many listings that are available
for Lease Option!
You will be surprised to know that there are plenty of potential great homes
that can be bought via the lease option. For more information and listings
available in your area, please fill out the form below and we'll get back to
you promptly.
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