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Contributor
sopho
Posts: 11
Registered: ‎08-13-2012
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Lease To Own

I was recently informed that many sellers are leasing out their properties while they wait for a more favorable selling climate.  I'm interested in exploring 'lease-to-own' properties.  Are there any legit websites/agents for this type of contract/property?  What are the advantages and/or disadvantages of lease-to-own contracts/properties?  As always, thanks in advance for your insight.  

Contributor
Flaaash
Posts: 37
Registered: ‎08-01-2009
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Re: Lease To Own

FYI, lease to own is not equivalent to leasing out a property and waiting for values to appreciate before putting it on the market.  Lease to own typically happens when

- the seller believe prices have peaked

- the buyer believes there's still an upside in value.

- or there is a lack of qualified buyers.

 

With the current uptrend in pricing, I doubt you'll find many sellers looking to do a lease to own.  Unless you both agree on paying more than today's market value or the seller believes prices have plateau.

Gold Contributor
BobPhillips-RE
Posts: 1,701
Registered: ‎12-13-2010
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Re: Lease To Own

Sopho, in the period from 2009 through 2011, many sellers had difficulty selling their houses, so they resorted to leasing them.  That - having difficulty selling their house - is no longer the case.

 

You might still be able to find a house to lease, where the owner MIGHT entertain a sale later, but, then again, he might not. As the other poster indicated, there isn't much incentive for an owner to lease his house - now - if his real preference is to sell it.  The for sale market is just too hot at the moment, and looks to stay that way, through this year's selling season - which will last into the fall.

 

Even the lease market is fairly hot, with monthly rentals going up, and owners demanding good credit, from their prospective tenants. Every lease I handle has been getting multiple applications, within a week or two.

 

Since Redfin agents don't work with lease clients, you should find an agent - like me - who does work with lease clients, in the areas you'd like to live in.  Good luck in your search.

All this, of course, is merely MY opinion. Thanks for reading.

Bob Phillips - Realty ONE Group - South Orange County, CA
Contributor
kevincw01
Posts: 30
Registered: ‎07-16-2008
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Re: Lease To Own

@sopho, Ill answer your actual question. I dont know of any websites that are specifically for this but if I were looking to do a lease to own, I would find a rental property I liked and ask the land lord if theyre interested. Bob is right that prices are rising, but this is exactly the time when lease to own is best for a buyer (not a seller). The way these contracts work is that the 2 parties agree to a price and furture sale date (typically 3-5 years). Then you pay rent plus a premium towards the future home purchase. When the future sale date arrives, if the buyer chooses not to buy then the seller keeps the premiums. in todays market you will need pay a higher premium and agree to a higher future sale price in order to entice a seller.
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BobPhillips-RE
Posts: 1,701
Registered: ‎12-13-2010
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Re: Lease To Own

kevincw01, a lease option transaction, like you described, is NOT typically a 3-5 year deal.  It is USUALLY a 1 year deal, seldom longer.

 

A homeowner/landlord with ANY kind of finger on the pulse of today's home's value market, would be STUPID to settle on a price even two years from now, let alone more.

 

Your comment was partially correct, though.  It would be best to target available listings that declare - in the MLS - that an eventual sale MIGHT be possible.  Unfortunately, in 2, 3, or 4 years, both buyer and seller situations could have changed.

 

I can't tell you how many landlords, who were NEVER going to sell - giving their tenants some initial piece of mind - who come back two years later, wanting to move back into their house, giving the tenant notice to vacate.

All this, of course, is merely MY opinion. Thanks for reading.

Bob Phillips - Realty ONE Group - South Orange County, CA
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Parnel
Posts: 3
Registered: ‎03-11-2013
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Re: Lease To Own

We all know the advantages of lease to own properties. However, some of us do not know the disadvantages.
Some of the disadvatages of lease to own properties are as follows:

  • It is harder to back out
  • Your buyer might back out
  • Lost time
  • Your buyer might ask for more

therefore keep these things in mind when planning for lease to own properties. I hope this information will help you in understanding lease to own option.

Platinum Super Contributor
Nanomug
Posts: 10,221
Registered: ‎05-30-2009
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Re: Lease To Own

Usually lease options have a high deposit and higher rent amounts with a certain amount going toward the purchase of the home.  If the buyer backs out they lose their deposits and higher rent amount.  Perhaps the seller doesn't care if the buyer backs out.

 

What is the "more" would the buyer ask for?


Parnel wrote:

We all know the advantages of lease to own properties. However, some of us do not know the disadvantages.
Some of the disadvatages of lease to own properties are as follows:

  • It is harder to back out
  • Your buyer might back out
  • Lost time
  • Your buyer might ask for more

therefore keep these things in mind when planning for lease to own properties. I hope this information will help you in understanding lease to own option.