Consider A Lease Purchase Agreement: Alternatives Conventional Methods
In its simplest form, a lease purchase agreement is nothing more than a written contract
to purchase real estate over an extended period of time, typically not exceeding 36 months. It is usually coupled with an agreement to allow the purchaser to occupy the house and pay rent on it while he is completing the purchase. I often consider using a lease purchase agreement when I'm thinking about how to sell my house to my tenants.
In contrast, a lease-option agreement is primarily an agreement to rent real estate. That agreement contains a provision granting the renter the option of purchasing the real estate at some point in the future if he so chooses. So, if I enter into a lease option agreement with people who are moving into one of my houses, that means they have the right to buy the house within a certain period of time, usually the entire lease period, and if they make a decision to buy it, I have the obligation to sell a house to them at the negotiated price. They pay an option fee for this privilege, usually a small amount upfront and sometimes another small amount added to their lease payment each month. Either way, I have to honor the agreement but they have the right to change their minds as regards buying the house, giving them the benefit of flexibility and time.
A lease purchase agreement on the other hand, obligates the purchaser from the first day of the agreement. It is a lease agreement that obligates the tenant to buy the house, and in fact he is already buying the house with his monthly payment, but he doesn't take title to the house until it is fully paid-off. These days a lot of people are finding that they need to find a creative way to buy a house. A lease purchase agreement is certainly one of my suggestions to prospective tenants when I explain how to sell my house to them.
Traditional lenders have tightened underwriting guidelines and raised minimum credit standards, and there are lots of first-time buyers who have been pushed out of today's buying market. A lease containing an option to purchase may give the buyer enough time to get qualified and make the purchase he or she wants. And a lease purchase agreement, which is very different from a lease with an option to purchase, allows interested buyers to started buying the house right away.
More tips for a speedy sale or lease:
What is the same about selling a house and getting a haircut? Well, once we decide it's time then we always seem to want it done yesterday. But it is easier to get a haircut on a whim than it is to get a house sold that way. Lots of people ask me, "What do I have to do to sell my house quickly? I guess they want to know what I think because I've bought and sold a lot of houses.
Then I have to pause a minute, because whenever someone asks me how to sell quickly a logical thought crosses my mind, and I have to be careful how I reply to them because I might personally be interested in buying their house. Although I haven't seen it, their house might be a good investment for me.
After giving consideration to buying their house myself, I begin to wonder if I should give them my real answer or tell them to talk to a real estate broker. Actually, this is a tough call for me because I like real estate brokers. Most brokers do a good job for their clients, but I make a point of only making referrals to brokers I know personally. Now let's answer the question, "How can I sell my house quickly?" The real answer is not what you think. It's not about a real estate broker at all, not really. My answer to them is, "You have to find the buyer yourself." I'm serious, that's exactly what I tell sellers who are determined to sell a house quickly. And what I mean by using that heavy-hitting sentence most sellers don't like is that each one of us knows our own house better than anybody else, so we know why other people will buy it, too. Which means we know who will buy our home, at least we know it's likely to be someone who appreciates the same features that we liked when we bought it.
As a homeowner who decides to sell your house yourself or to hire a broker to help you, it's good to remember there is one secret to selling a house quickly. The secret is to think really hard about who might want to buy the house right now and then go talk to those people to find out if they are interested. It's not really a process of "selling," it's a process of finding someone who is already interested.
In this area, brokers do not have an advantage over the homeowner. You know your neighbors and you know where they shop and where they hang out. Your neighbors are the best prospects to consider, and those are actually the people whose family members or friends may want to move into the neighborhood, too. Go talk to the people in your neighborhood and find out if they know anyone who might be interested in your house. Now you know my top reply to the question, "How do I sell my house quickly?" My answer is: Talk to your neighbor and do it now!
by: Leo Kingston
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