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“When you lease to own, you can build equity, lock in a home price and secure your finances - all while building a future for you and your family”.
How it Works
If you find a house you like you just simply pay the downpayment which goes towards your purchase price!
You sign a lease like your normally would but with a few extra sheets of paper that give you the option to buy the house within the agreed upon amount of time. You then make monthly rent payments while building up your credit. If you are able to exercise your right to purchase the home at any point during the agreed upon period of time you get the house! And typically at a lower price than the market would say its worth at that time. That is called exercising your option.
If you are unable to purchase the home at the end of the option period then we work together to decide what is best for you. Some people move out at that time and others decide to sign another option agreement for an additional period of time if they just need a little longer to get their finances in order to buy the house. We are flexibile and want to work with you to achieve home ownership!
What is a Lease Option Anyways?
A lease option, also known as a "rent-to-own" or "lease-to-own" option, is a real estate agreement that allows you to rent a home with the option to purchase it at a later date. Essentially, it's a combination of a traditional rental agreement and a purchase agreement, giving you the flexibility to test out the home and the neighborhood before committing to buying it.
With a lease option, you typically agree to a set term for the lease, which could be anywhere from one to three years or more. During that time, you pay a monthly rent payment to the landlord/owner of the property. However, unlike a traditional rental agreement, you also have the option to purchase the property at a later date, usually at a predetermined price that is agreed upon upfront.
The lease option agreement may also include a provision for a portion of your rent payments to be applied toward the purchase price of the home if you decide to buy it. This is sometimes referred to as a "rent credit" or "option credit," and it can help you build up a down payment over time.
One of the benefits of a lease option is that it allows you to lock in a purchase price for the home, even if you're not ready to buy it right away. This can be especially helpful in a hot real estate market where prices are rapidly rising, as it gives you the opportunity to secure a home at a lower price before it becomes unaffordable.
Overall, a lease option can be a great option for those who want the flexibility of renting with the option to buy, and who want to test out a home and neighborhood before committing to a long-term purchase.
What things should I consider before moving forward with a lease option?
Before moving forward with a lease option, there are several important things you should consider:
Your Financial Situation: Make sure you can afford the monthly rent payments, as well as any potential future purchase payments, before entering into a lease option agreement. You should also consider whether you have the financial stability and creditworthiness to secure a mortgage loan when it's time to buy the home.
The Property: Thoroughly inspect the property before signing a lease option agreement. Consider the condition of the home, the neighborhood, and the local real estate market. Make sure the purchase price is reasonable and reflects the market value of the property.
The Lease Option Agreement: Carefully review the terms of the lease option agreement. Consider the length of the lease, the purchase price, the option credit, and any other provisions that may affect your decision to buy the property.
Legal Advice: Consider consulting with a real estate attorney before signing a lease option agreement. They can review the contract, explain any legal terms, and ensure that you fully understand your rights and obligations.
The Landlord/Owner: Research the landlord or owner of the property. Check their reputation and track record to ensure they are reliable and reputable.
Your Long-Term Goals: Consider your long-term goals and whether a lease option aligns with them. If you're not sure you want to commit to buying a property, a lease option may not be the right choice for you.
Overall, a lease option can be a great option for those who want the flexibility of renting with the option to buy, but it's important to carefully consider all aspects of the agreement before moving forward.
Do I need an attorney or closing attorney?
Whether or not you need a closing attorney to start a lease option agreement will depend on the laws and regulations of your state or country, as well as the terms of the agreement itself.
In some states or countries, it is customary or required to use a closing attorney for real estate transactions, including lease option agreements. In other places, it may be more common for the landlord/owner and tenant/buyer to handle the transaction themselves or with the assistance of a real estate agent.
That being said, it is always a good idea to consult with a real estate attorney before entering into a lease option agreement. They can review the terms of the agreement, ensure that your rights are protected, and help you understand the legal and financial implications of the agreement.
If you do decide to use a closing attorney, they will typically handle the legal aspects of the transaction, such as preparing and reviewing the contract, ensuring that all necessary legal requirements are met, and facilitating the transfer of ownership when the time comes to purchase the property.
Ultimately, whether or not you need a closing attorney will depend on the specific circumstances of your lease option agreement and the laws and customs of your jurisdiction. It is always a good idea to consult with a real estate attorney to ensure that your rights and interests are protected.
How do I qualify for a lease option home?
Qualifying for a lease option home will depend on the specific requirements set by the landlord/owner of the property. However, in general, here are some factors that may be considered when determining whether or not you qualify for a lease option:
Income: Landlords/owners will typically want to ensure that you have a stable income that is sufficient to cover the monthly rent payments, as well as any future purchase payments.
Credit History: Your credit history may be a factor in qualifying for a lease option. The landlord/owner may want to ensure that you have a history of making payments on time and managing your credit responsibly.
Employment History: Having a stable employment history can demonstrate that you have the financial stability to make the required payments over the term of the lease option agreement.
References: The landlord/owner may ask for references from previous landlords or employers to confirm your rental and employment history.
Down Payment: Some lease option agreements may require a down payment or option fee to secure the property. This can demonstrate your commitment to the property and may be used to reduce the purchase price or as a credit toward the purchase price.
The specific qualifications for a lease option will depend on the requirements of the landlord/owner and the specific terms of the agreement. It is important to carefully review the terms of the agreement and make sure you meet the qualifications before entering into the agreement.
What do I have to pay to move into a lease option home?
The costs associated with moving into a lease option home will vary depending on the specific terms of the lease option agreement, as well as the landlord/owner's requirements. However, here are some common costs you may encounter:
Rent Payment: The lease option agreement will specify the monthly rent payment, which is typically due at the beginning of each month. You will need to pay the first month's rent in advance before moving in.
Option Fee: Some lease option agreements require an option fee or a down payment to secure the property. This fee can range from a few hundred to several thousand dollars, depending on the terms of the agreement.
Security Deposit: Like with traditional rentals, the landlord/owner may require a security deposit to cover any damages or unpaid rent. This deposit is typically refundable at the end of the lease option period if you decide not to purchase the property.
Utility Deposits: You may be required to pay a deposit to start utility services, such as electricity, gas, water, and internet. This deposit is typically refundable when you close the account or move out.
Moving Costs: You will need to pay for any costs associated with moving, such as hiring movers, renting a moving truck, or purchasing packing materials.
It is important to carefully review the lease option agreement and understand the costs associated with moving into the property before signing the agreement. You should also ask the landlord/owner about any other costs or fees that may apply, such as late fees, pet fees, or maintenance fees.