Summary of Lease with an Option to Buy
Summary: A Lease with an Option to Buy gives the renter the opportunity to buy a house at a future date at an agreed upon fixed price with a small initial down payment. For example, let’s say we were offering to sell a house at a current price of $184,900 or with an Option to Purchase at a future date with $4,500 down (“Option Consideration”). At the end of a 24-month lease, the tenant will have the opportunity to buy the house at $184,900 less the $4,500 down. In addition, we would allow $200 of each monthly rent payment to go towards the purchase price as well. Therefore, at the end of the 24-month lease, the tenant will have accumulated approximately 5% down ($9,300) on the property. For Example: Price of House : $184,900 If property is purchased at the end of the lease. Price Less: Option Price Less: Rent Credit Price Owed to us = = = = $184,900 $4,500 $4,800 $175,600
Provided the tenant has a good credit rating, they should would be able to go to a bank and get a loan for the $175,600.
Key Advantages: 1. Lease options work well for people who need a little time to repair some minor credit problems or just want to wait to make a purchase. Assuming the tenant makes timely payments, the history with the Landlord will be an excellent credit reference with the future mortgage company. Works well for people who need or want to live in a beautiful home immediately even though they are not is a position to buy at this time. Since the purchase price of the house remains fixed during the lease term, the tenants may be able to purchase the property at a price lower than it is worth. Allows the tenant to “try out” the property before they buy with a smaller amount of money at risk than would be if they purchased it out right.
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Important Items to Understand; 1. The Option Consideration ($4,500) and all rents paid are non-refundable. If you don’t buy the house, you are not entitled to any refunds. If you are evicted because of a lease violation, all monies paid are forfeited. 2. The property is being sold to you in “As Is” condition. Even though we have made every effort to give you a property in good condition, we do not warrant the property. 3. Most routine maintenance and repairs required on the property are the tenant’s responsibility. The lease rate we charge you does not allow us to take on normal routine maintenance and repairs.
This sheet is for informational purposes only. The actual terms and conditions of any agreement will be made in writing by executing a Rental Agreement, Option Agreement and any related addendums. We reserve the right to modify any terms stated above at our sole discreation.