Lease To Own
Lease + Option to Buy = The Key To Your Dream Home!
In today’s market, many families find it difficult to qualify for a bank loan to buy the home of their dreams. But they would love to work toward home ownership, especially at today’s deflated prices! That’s where the Lease with an Option to Buy may enable buyers to achieve their dreams.
The main obstacle? Not all buyers have the luxury of good credit and an abundance of cash for the down payment. Fortunately, these can be just temporary obstacles. So by employing the Lease-Option strategy over a period of 12-18 months, many buyers can immediately move into the home of their choice, regardless of credit problems or a shortage of cash.
The power of the Lease Option strategy is that it allows buyers to take advantage of today’s low prices by locking in the purchase price, while taking advantage of the potential for appreciation. We know from history that single family homes have grown in value at a rate of 5-10% per year. Down markets are followed by up markets!
After the price and terms are locked in by (the “Option” agreement) the buyers can work on their challenges during the Lease period while living in their dream home. For example, during the 12-18 months of leasing, the buyers can improve their credit by establishing a good payment history on their home (while also building equity). The combination of a good payment history and increased equity better equips buyers to acquire financing by the end of the option period.
Example: Value of Home: $250,000
Option Money (5%) = -$12,500
(100% applicable to purchase price
at closing)
Balance owed on Home: $237,500
($250,000 minus $12,500 Option Fee)
Increased Value of Home after 24
months @ 5% = $275,000
(for
illustration purposes only)
We can help you realize your dream of home ownership during
these tough times, and will work to provide you with the home you’ve always wanted.
Disclosures: 1) The buyer must obtain his/her own financing in order to exercise the option to purchase when the term ends, and must do so by end of the term. Failure to obtain financing by the end of the option period could mean the loss of the option fee.
2) The above stated information is offered to serve as an example. In no way should this be implied as a guarantee for a future loan commitment or purchase of a property. Also, the appreciation rate mentioned on houses is not guaranteed in any way. We strongly recommend that all buyers consult an attorney before signing the lease agreement and/or the option to purchase agreement.
