LEASE TO PURCHASE – DON’T THROW YOUR MONEY AWAY!

If you are interested in renting to own your next home, there are many ways we can present this to the homeowner for consideration.

In Texas, Agents/Brokers cannot combine the Lease Agreement and the Sales Contract – it is required to remain separate.

1.      Choose the amount of rent you want to pay – ie, rent rate only; rent rate plus a percentage over to count toward down-payment and/or closing costs, etc. when you do buy.    In some cases, the owners may allow a specific percentage of your rent payments to count toward the pre-paids and/or down payment at closing, thereby crediting back some of your monthly lease rate.  Likewise, the lease Security Deposit can be credited at closing as well in most cases.

2.      Complete a separate purchase contract that is negotiated up front BEFORE you take possession of the property.  It is recommended that you also complete a home inspection prior to moving in so that any issues are addressed up front.  In order to make a sales contract legal, the buyer must pay both an earnest money deposit to a Title Company and an option fee payable to the Owner in order for you to reserve the right to terminate the contract without cause.

a.       Option Fee amounts can vary and are negotiable and can range from $100 and higher and would be for a term of 1 year period in line with the lease term.  This amount is typically non-refundable if you terminate; however, it is 100% credited at closing if you move forward with the purchase.

b.      Earnest Money Deposits are typically 1% of the sales price – ie, a $100,000 home would require an earnest money deposit of $1,000.00.  This fee is fully refundable if you terminate the contract within the Option Period.

3.      You can move in within days of signing the lease, the separate purchase contact that allows you the full ability to terminate it anytime within the year, as long as you have paid the above mentioned required fees.  You now have the option to purchase the home during the lease period.  If you choose to exercise your option to buy within the lease period, 100% of the option fee, earnest money deposit, and any pre-negotiated lease payment percentage allowances will be credited at closing.

Don’t throw away money!    Make 2012 the year that you stop wasting money and begin saving for a home of your very own.  For more details, contact me at (713) 515-2135.