Lease to own option agreements are contracts that allow you to lease a property with the option to purchase it at the end of the lease period. Typically, a time frame for the lease is established between one to three years. At the end of the lease, you are able to purchase the home at a predetermined price.
This program, also know as a lease with purchase option, is perfect if you have dreamed of a being a homeowner but don’t have a downpayment. This option is great if you have low or bad credit history and cannot obtain a mortgage. While a lease with purchase option agreement may seem great for your situation, there are also risks you should know about. Be aware of the following five steps before signing your contract.
Fair Sales Price
While the house is under contract, you are the only party who has the option to purchase. The sale price is locked in when you sign the lease with purchase option agreement. Most of the time you should be able to buy the property anytime during the lease period, although this may vary. Make sure that you receive a fair market price for the home before agreeing to the lease. The price will be to your advantage if the market goes up in value during the lease, but will not be as good if the property depreciates.
Complete A Home Inspection
Have a home inspection completed and make sure the property is in good condition. Ensure the structure is sound and there are no other issues that could end up costing you down the road. You should keep photos and documentation of the home at all times.
Conduct A Title Check
When obtaining a mortgage for a new home, you need to check the title to make sure there are no liens against the property. The same should be done for your lease with purchase option agreement. Once you have completed the lease and begin purchasing the home, you do not want to find a problem with the title.
Clearly Understand The Exit Clause
In a lease with purchase option agreement, you should have the choice to decide against buying the property at the end of the lease. You may choose to leave for several reasons. You may not like the area, the layout of the home, or the home may not be a good fit for you. The agreement should specifically state what happens if you decide not to purchase the home after the lease period.
Make Sure Seller Keeps Up With Their Obligations
Ensure the seller keeps up their property taxes on the home. Between yourself and the seller, make sure that insurance responsibilities are understood. This agreement is a contract you are entering into and you should contact a professional to make sure your legal rights are protected. Talk to someone who is familiar with lease with purchase option contracts and who understands the process.
IPS Amarillo In Amarillo Texas
IPS Amarillo offers a lease with purchase option for customers who are not ready to enter into a mortgage. This type of lease is perfect for people that don’t want to lose all their investments to rent, yet are not quite ready to commit to a mortgage. If you choose to pay the option fee, it will reduce your monthly payment. If you don’t want to pay the option fee, you will get a monthly credit towards your home purchase. Learn more about our Lease Options today!
We have many Available Properties in Amarillo and the surrounding area. For more information about the homes we offer, give us a call at (806) 220-6816 or Contact Us via email. You can also visit us in person at 5701 Time Square Blvd. #340 in Amarillo, Texas.