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Lease Purchase for home - As the seller
Posted on 8/8/12 at 8:23 pm
Posted on 8/8/12 at 8:23 pm
Need tips as the seller. Buyer wants to lease purchase my home for 9 months. Put down $8000 deposit. Any pointers out there?
3
Posted on 8/8/12 at 11:44 pm to buford4LSU
in my experience they never follow through to actually purchase the house. I know one guy who only rents to people who want to rent to own so he can keep their deposits and higher rent payments.
eta: if it is an investment property I would say go for it. if it is your primary residents and you're depending on the payment for your next home I would wait for a traditional buyer.
eta: if it is an investment property I would say go for it. if it is your primary residents and you're depending on the payment for your next home I would wait for a traditional buyer.
This post was edited on 8/8/12 at 11:53 pm
Posted on 8/9/12 at 7:51 am to buford4LSU
you get to keep the 8000 if he fails to follow through with the purchase?
Posted on 8/9/12 at 9:19 am to Alabama Slim
quote:
in my experience they never follow through to actually purchase the house. I know one guy who only rents to people who want to rent to own so he can keep their deposits and higher rent payments.
In your opinion, why do these things always seem to fall through? I've always been curious about this and have considered doing this as a buyer.
Posted on 8/9/12 at 10:18 am to ZereauxSum
quote:
why do these things always seem to fall through? I've always been curious about this and have considered doing this as a buyer.
These deals tend to fall through because the buyer is unable to get long term financing. The reasons they could not buy at first are usually still an issue at end of agreement.
I did a lease purchase sale in 1990. Guy was going through a divorce and his father was going to pay cash and finance for him, but only after the final decree. Worked out great and he ended up closing early.
Posted on 8/9/12 at 10:48 am to Pilot Tiger
Yes, I keep the $8000
Posted on 8/9/12 at 11:04 am to buford4LSU
I think if you are having trouble selling the house, it can be good for the seller. Just treat it as a rent agreement but as others stated they very rarely go through. Most of the time it's b/c either the buyer can't get financed or when he finally can gets financed, the market may have changed and he found a better deal or a better house that suits him better.
Just make sure your contract is very clear.
Just make sure your contract is very clear.
Posted on 8/9/12 at 11:16 am to LSU1018
IMO these deals are better than traditional renting.
1- "Buyer" will take much better care of the property thinknig he may buy down the line.
2- Deposits as mentioned above.
The first home I purchased in La, it was just after our newborn's medical issues. We had destroyed credit.
We bought on the northshore with a Bond for Deed contract. Everything went pretty well. We extended the contract once, then were able to get financed the following year.
As the buyer, I can tell you it was a little sticky when we went to closing because the house had appreciated $20k in the 3 years we were "renting". The seller did not have a problem with it, but his ex-wife, who was on the title with him did.
It took about 30 minutes and 3 attorneys at closing to convince her that the house was actually "sold" 3 years prior, at the price at that time, and we were just completing the contract. She was pissed. (which I think secretly pleased the seller
)
1- "Buyer" will take much better care of the property thinknig he may buy down the line.
2- Deposits as mentioned above.
The first home I purchased in La, it was just after our newborn's medical issues. We had destroyed credit.
We bought on the northshore with a Bond for Deed contract. Everything went pretty well. We extended the contract once, then were able to get financed the following year.
As the buyer, I can tell you it was a little sticky when we went to closing because the house had appreciated $20k in the 3 years we were "renting". The seller did not have a problem with it, but his ex-wife, who was on the title with him did.
It took about 30 minutes and 3 attorneys at closing to convince her that the house was actually "sold" 3 years prior, at the price at that time, and we were just completing the contract. She was pissed. (which I think secretly pleased the seller
)This post was edited on 8/9/12 at 11:16 am
Posted on 8/9/12 at 12:21 pm to Blakely Bimbo
quote:
These deals tend to fall through because the buyer is unable to get long term financing. The reasons they could not buy at first are usually still an issue at end of agreement.
Ah, that makes sense. So really there's nothing to fear as long as you understand the agreement and your own situation.
Posted on 8/9/12 at 6:48 pm to buford4LSU
I have a house in Port Vincent that is currently under a lease purchase agreement. I think that everything said earlier is basically correct. To me, the advantages to the seller are that the tenant will typically take better care of the property, there are larger security deposits, the owner retains the tax advantage of owning the property. To me, it beats a typical revolving door tenant scenario.
In our agreement, the tenant is responsible for all repairs, association dues and their personal property. I am responsible for property insurance, taxes and termite contract.
In our agreement, the tenant is responsible for all repairs, association dues and their personal property. I am responsible for property insurance, taxes and termite contract.
Posted on 8/10/12 at 9:19 am to Meauxjeaux
quote:
the house had appreciated $20k in the 3 years we were "renting"
That is interesting. If they house would have depreciated, say to a greater amount than the deposit you put down, are there traditional clauses that state that you have to pay a higher penalty as the buyer if you choose not to follow through and purchase the house.
I've never purchased a home, but that seems like a nice way to mitigate some risk in a turbulent housing market. You have a floor on the money you could potentially lose on a housing transaction while locking in unlimited appreciation of the homes value.
Posted on 8/10/12 at 9:37 am to Waffle House
Only issue then would be getting past the appraisal stage....
Banks dont want to lend on a property being sold for an amount substantially higher than what the property is actually worth.
Banks dont want to lend on a property being sold for an amount substantially higher than what the property is actually worth.
Posted on 8/12/12 at 10:29 am to cjared036
Understand the motive of the buyer-
Posted on 8/12/12 at 1:17 pm to 756
quote:
Banks dont want to lend on a property being sold for an amount substantially higher than what the property is actually worth.
I would imagine most rent to owns are owner financed, but I could be wrong.
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