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This page tells you a bit about the different ways to occupy property and the different ways to buy property.  

Methods of purchasing a property: 

Traditional Sale - Bring money to a closing (thanks to that wealthy uncle, lottery winnings or, more typically, a loan from a bank), sign a bunch of documents and violà - the house is yours!

A Lease Option, also known as "Rent to Own" is a program we offer through which renters turn into home owners.  Because a Lease Option program is of interest to many people these days, we've provided more information below. 

A Land Contract, also known as an "Installment Sale" is a way to own the home today even if you can't qualify for a traditional mortgage.  In a Land Contract, the seller is "the bank."

Lease Option 

Lease Options are attractive to folks who have found a great house and who want to be home owners but are not ready or able to buy at this moment.  Maybe they need to sell an existing house or maybe they need a bit of time to work on their credit.  But they know they seriously want to get started on the road to home ownership.

The term "Lease Option" means there are two agreements between the seller and the buyer.

The first is the Option.
This is an agreement that says the seller gives the buyer the right to buy the property for a stated price within a stated timeframe.  It may also contain other conditions such as: how the buyer can earn additional credits toward the purchase of the house and who is responsible for maintenance (fixing things that need repair) and improvements (adding that hot tub, etc.).  For the right to buy the house at a guaranteed price within a stated timeframe, the buyer pays the seller an Option Fee.  This fee is applied to the purchase price of the house - think of it as a down payment.  Because the seller is taking his/her house of the market for this buyer and foregoing other opportunities to sell, this fee is usually non-refundable. 

The second is the Lease
While the buyers are tying up the lose ends that prevented them from buying the property outright, they are renting the property they soon will own.  The Lease spells out the terms for renting the property. 

Please note: We provide excellent properties and attentive service.  In return, we demand honest, considerate and intelligent customers.  We perform thorough background checks including criminal, rental and employment history. 

Summary of our Lease Option Program.

Option Fee applied to Purchase Price
Security Deposit applied to Purchase Price
$100 of Rent applied to Purchase Price*
10% added to additional money paid by tenant/buyer toward Purchase Price*

*certain conditions apply.  See "Lease/Option Program Summary" and  “Buyer/Seller Option to Purchase Real Estate” document links below for details.

 

Land Contract

Purchasing a property via Land Contract is somewhat like buying a car with financing: you own the property but the deed remains with the lender (in this case, the seller) until the final payment has been made.  In the meantime, the buyer is responsible for all maintenance and repairs, taxes and insurance.  Taxes and insurance are sometimes included in the payments to the seller.  During this time, the buyer reaps the benefits of home ownership including deductions for property taxes and interest.  

 In most cases (as is the case with us) the Land Contract is for 3 or 4 years, after which the buyer must pay the remaining balance, usually by obtaining financing from a traditional lender (bank, mortgage company, etc.).  Buying via Land Contract is attractive to folks who want to own today but whose credit is not quite where it needs to be to obtain a loan from a traditional lender.  

If we sell via Land Contract it is because we expect the buyer to find alternative financing at the end of the Land Contract term.  In the past we've sold to buyers who failed to work to improve their credit.  Failure to meet the terms of a Land Contract is an expensive mistake for the buyer and does not meet our objective of selling a property.  Therefore, we will only consider selling on Land Contract to folks who are already working with a credit counselor or agency, or who can show a meaningful improvement to their credit score over the past 12 months. 

 

 

 

 

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Last modified: December 26, 2013