Lease to Own Homes by P_Gallo


									Lease to Own Home
Summary: Seller(s): Buyer(s): _____________________________ ______________________________ ______________________________ ______________________________

Home/Subject Property Address:

______________________________ ______________________________

Legal Description:

______________________________ ______________________________ ______________________________ ______________________________

Recitals: 1. The Buyer wishes to purchase a home but is unable to qualify to purchase a home at this time. 2. The Seller will purchase the home described above for the Buyer and the Buyer will lease the home from the Seller. 3. During the lease period which will be one (1) or two (2) years, the Buyer will receive assistance from the Seller with credit counseling and financial advising and planning so that Buyer may better qualify for financing to purchase the home at the end of the lease period. 4. The Buyer will make a deposit in the amount specified in this agreement and that deposit will be applied to the purchase price for the home at the end of the lease period. 5. Buyer understands and agrees that the deposit is not refundable to the Buyer (once escrow closes and the home has been moved into) and is intended to partially compensate the Seller for Seller’s services, efforts and cost in acquiring the home should Buyer fail to purchase the home for any reason. 6. Buyer understands that the cost of the home will be more than the Seller paid to purchase the home. The increase in price to the Buyer covers Seller investor fees (net 15% 1st year – net 22.5% 2nd year) for services rendered. 7. Once the deposit is made by the Buyer, the offer for subject property accepted and this agreement is signed, the Seller will purchase the home and the buyer will move into the home and begin making lease payments.

Agreement 1. Term: This agreement shall be for a term beginning _______ _and ending ______ (12 months). Buyer will take all steps necessary to obtain financing in order to purchase the home from the Seller by the end of the term. The purchase price for the home shall be $______. At Buyer’s request, Seller agrees to extend this Agreement for an additional period of 12 months, through __________. The provisions of an additional extension are as follows:  Buyer shall not be in breach of ANY terms of this contract.  All payments shall be made according to the terms provided in this Agreement. Buyer must not have made any late payments.  The purchase price for the home at the end of the second term (between the 13th month and 24th month) shall be $_________ which is 22.5% more than the original purchase price.  Additional deposit $__________ (equal to 2 months mortgage payment) nonrefundable Lease Option/Purchase Deposit. 2. Deposit/ Lease Payment:  $________ Lease Option Deposit paid in full upon execution of this Agreement. This deposit shall be applicable to the purchase price for the home.  Monthly lease payments in the amount of $________ due by the first of each month beginning on ____________. Possession of the home will be delivered on ___________after the first lease payment is made. 3. Lease Payments: The monthly lease payment shall be $______________ per month, beginning _________ and ending on ____________. Buyer shall provide to the seller the first month lease payment of $____________ prior to taking possession of the home. Buyer shall make the monthly installments on or before the 1st of every month. A late charge of 6% of the payment amount is due and payable if the payment is not received within five (5) calendar days of the initial due date. Any payment received after the fiveday grace period is considered late. Payment is to be made in the form of a personal check or money order. Cash WILL NOT be accepted. Buyer understands a late payment is considered a breach of this Agreement and will be case for eviction and forfeit of all deposits/payments. 4. Delivery of Payment: Buyer agrees to make monthly lease payments payable to __________ and shall deliver such payments to the following address on or before the 1st of each month:

5. Payments & Credits: A total of $_________ is Lease Option Deposit noted in paragraph 2 of this Agreement and shall be credited toward the purchase price of the home at closing. Of the required monthly lease payments, there shall be NO credit applied to the purchase price. In the event the Buyer and Seller extend this Agreement for one additional year, the additional $__________ Lease Option Deposit shall be credited toward the purchase price at closing. 6. Utilities: Buyer agrees to pay all utilities including but not limited to water, electric, telephone, cable television and garbage pick-up.

7. Condition of Home: Buyer has examined the home and acknowledges it to be in good repair and agrees to buy the property in “As Is” condition. Buyer understands his right to have the home inspected by an inspector of his choice and at his expense prior to execution of this Agreement. 8. Maintenance: During the lease term, Buyer agrees to keep the premises in good repair and agrees to maintain the home including but not limited to the roof and all interior and exterior structures. Buyer agrees to protect the home against damage, loss, removal or theft. Buyer shall be liable for repair, replacement or rebuilding of any portion of the home damaged by the Buyer, their guest or visitors. 9. Assignment: Buyer Tenant MAY NOT assign this contract. 10. Sale by Buyer: Buyer shall not contract the property for sale during any term of this Agreement. 11. Use: Buyer shall not use the home for any illegal purpose or any purpose, which will increase the rate of insurance. Buyer further agrees not to store any hazardous waste at the home. 12. Lawn: Buyer shall maintain the lawn and landscaping at the home at his expense. 13. Liability: Buyer shall be responsible for insurance on his/her personal property. 14. Access: Seller reserves the right to enter the home for the purpose of inspection with reasonable notice to the Buyer. 15. Parking: The Seller allows the Buyer to park or store automobiles and watercraft at the home if allowed by any covenants on the home. At no time may any other type of vehicles be parked at the home, which is in violation of any local ordinances or laws. Any charges, fines, or fees as a result of parking violations are the responsibility of the Buyer. 16. Furnishings & Appliances: Any furnishings and appliances provided to the Buyer are to be maintained in good condition by the Buyer. Should the Buyer forfeit the Agreement, all items shall be returned in good condition to the Seller. If buyer purchases the home, all furnishings and appliances are to become the property of the Buyer. 17. Alterations and Improvements: Buyer is allowed to make alterations and improvements to the home. Such alterations shall become the property of the Seller in the event of breach of contract by the Buyer. Otherwise, all improvements made by the Buyer become the possession of the Buyer upon Buyer’s purchase of the home. A separate written addendum is to be agreed upon and executed detailing such proposed improvements. 18. Entire Agreement: This Agreement constitutes the entire agreement between parties and may not be modified except in writing and signed by both parties. 19. Recording: This Agreement MAY be recorded in the public records of the appropriate County. Seller agrees to record this Lease Option Agreement if required by Buyer’s lender.

20. Severability: In the event any section of this Agreement shall be held to be invalid, this shall not affect the remaining provisions. 21. Agreement to Purchase: Seller agrees to sell and Buyer agrees to purchase the home, with closing on or before ____________, or through an extended period as per the provisions in paragraph I of this Agreement, conditioned upon Buyer not being in violation or in breach of ANY items within this Agreement, in which case any and all deposits, payments and/or improvements shall be forfeited as partial payment to the Seller for services and financial obligations incurred. Purchase shall be completed under the following terms and conditions: The Purchase Price of $__________ less the deposit and subject to standard closing fees and costs shall be paid, at the end of the first term. The purchase price for the second term shall be determined as provided in paragraph 1 less the deposit and subject to the standard closing costs and fees.

Accepted and Agreed to This _______ day of ______________. Buyer(s) ______________________________ _____________________________ ______________________________ Date Seller(s) ________________________ ________________________ ________________________ Date

_____________________________ Witness _____________________________ Date

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