Well you’ve heard of landlords offering lease options and rent-to-own deals in order to attract more tenants for their properties but that is not what you are looking for. You are just a regular ol’ home seller that needs to rent your house to a real bona fide buyer, for a little while, until they can qualify for their new mortgage.
You don’t want a lease with the option to purchase. You want a genuine purchase and sale agreement that simply allows the buyer to rent the property until they can close.
A properly drafted Lease Purchase Agreement is the class of form you will want to use. Unlike a lease option, where the tenant may or may not have a desire to actually buy the house, a lease purchase is the preferred agreement when the final intended outcome of the parties is the actual purchase and sale of the real estate involved.
It is basically a real estate contract with an extended closing date and a lease attached but there are several things that need to be spelled-out in the paperwork before the tenant-buyer moves into the home.
If you are the seller, you want to be sure the agreement clearly states that the buyer will have a leasehold estate only, until they close on the property. This does not mean you cannot require a non-refundable purchase deposit, which will count toward their down payment when they close on the property. After all, you are taking your house off of the market and therefore passing up on other potential buyers, so you want to be certain they are serious about actually closing on the property. Having a substantial non-refundable deposit, does just that.
If they do not have at least a reasonable purchase deposit, you may want to give the entire situation some serious consideration before entering into a lease purchase agreement with them. While this is just one factor in their financial stability, it may indicate that they will have trouble actually getting the new mortgage they will need to buy the house before the end of the agreement.
You should also consider getting their permission (via a signed release, if necessary) to talk to their loan officer or mortgage originator and make sure they have a really good chance of acquiring the home loan they will need to purchase the property within the time-frame agreed to in the contract.
Another thing you want to address up front, in the paperwork, before they ever move into the house is who is going to pay which Closing Cost when they close on the purchase. If this is not clearly stated & agreed to (in writing) at the beginning of the deal, things could get really ugly at the end. Since you are offering them the advantage of being able to buy the house under a lease purchase, it is typically pretty easy to negotiate that they pay most of the closing costs. Just be sure to do it before you let them take possession of the property.
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While a lease purchase agreement is not the same as a lease option, it is also not the same as a Bond-for-Title or Contract-for-Deed. You are not owner financing the real estate. You are simply allowing them to rent the home until they can close.