In our previous post, we discussed some of the frequently asked questions and answers about lease-to-purchase homes. In today’s post, we will continue that discussion as we address this further. If you thought that purchasing a home was out of the question for you, consider whether or not a lease-to-purchase option might work, and then contact IPS Amarillo Homes and let us show you all the possibilities.
1. What maintenance am I responsible for?
When you rent an apartment or home, it is generally understood that the landlord or property management company will take care of any repair needs that may come up during your period as a renter. When you enter into a lease-to-purchase agreement, however, this may not be the case. Before you assume that the homeowner will take care of everything, be sure that you read the contract carefully. In fact, feel free to ask what they are responsible for, and what they are not. Make sure that everything is clearly stated in the agreement you sign. For example, mowing the lawn and raking the leaves are very different tasks from repairing or replacing a damaged roof, and having the electrical components brought up to code. Clarifying obligations before you sign the contract will be a great benefit to both parties.
2. Who covers the home insurance and real estate tax?
Usually, sellers will cover costs such as homeowner association fees, taxes, and insurance because it is still their house. Since they are the ones ultimately responsible for these fees, it makes sense that they would maintain these payments, but make sure that this is clarified and not assumed. Regardless of what they choose to take care of, it would be a good idea to secure a renter’s coverage policy from your insurance company. These types of policies will cover the contents of the home without making you financially responsible for the structure itself. If your property is damaged due to a problem with the structure of the home you are in, your renter’s policy should cover the replacement of your items.
3. How much will I be charged each month?
A good way to give yourself an idea of what you can expect to pay each month is to look at similar properties nearby and see what they are renting for. While they will not be able to provide an exact amount for your circumstances, it will be close enough for you to decide if that neighborhood will work for your budget. The option fee varies depending on the homeowner as there is not a standard rate for this. Typically, you can expect to pay a deposit in the neighborhood of $3,000, but again, this depends on the transaction that occurs between you and the seller. The monthly rent credit is another variable, but you can expect to receive about $100 to $200 per month.
4. Do I have to purchase the home?
At the end of your agreement period, if you decide that you do not want to purchase the home, you are free to walk away. The downside to not purchasing the home is that you will not be able to recoup your option deposit, nor will you receive any rent credit benefit. If you walk away, it will be just as if you left a rental property with no long-term benefits from all of the money you have spent. As we have said before, a lease-to-purchase option gives you the opportunity to get a good feel for the pros and cons of the home, as well as the neighborhood. After your agreement period has ended, you may have discovered a couple of items that change your mind about purchasing the home. The good news is that with a lease-to-purchase option, you are free to leave at that point.
IPS Amarillo Homes has seen how lease-to-purchase homes can benefit people who really want to become homeowners, but are unable to pursue the traditional route of mortgages and loans. If you are interested in how a lease-to-purchase option can work for you, then please contact us today and let us show you how you can become a homeowner.