Underground Journal

Lease Options are Good for Buyers and Sellers!

The recent announcement that FHA is once again tightening their guidelines and increasing the cost of loans means that even fewer people will be able to get into a home.  In a market where buyers were already struggling to buy and sellers are struggling to sell, this obviously is not good news.

Both buyers and sellers are being force to be inventive and consider other options to a traditional home sale.  Many people who need to move are considering a lease option or lease purchase as an alternative.

A lease option can be good for both a buyer and seller, but only if it is handled correctly.  Both buyers and sellers need to be willing to create a situation that is beneficial to the other party.  This means a fair sales price, long enough term and properly structured contract.  Additionally, the buyer must be serious about doing what it takes to repair their credit and qualify for a mortgage.  They should look for the best credit repair company that they can find or decide that they are going to do what it takes to repair their own credit.  If income documentation is also an issue, this should be addressed as well.

A lease option benefits the seller because they are able to sell their home quickly.  Very often, this gives them relief from a payment on a home that they are no longer living in and cannot really afford.  It also allows them to receive full fair market value for the home rather than having to offer it at a steep discount.

The benefits to the buyer are that they are able to get into a home now rather than remaining a renter.  They begin building equity from day one, because a porting of each payment will be credited to the purchase price in the form of a rent credit.

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