Lease To Own a Fixer-Upper – Is It Worth It?

What is a lease to own a home? Is it worth considering? If you are unsure, you can find detailed answers here. Lease to Own has been around for many years now, but it was recently made a popular show. Due to this, many people are considering this method of buying a home. It is similar to the “lease of the home,” but with an added option. This is a type of agreement that allows a buyer to move into the home, while they are still working on getting all the necessary financing ready.

There is a lot to like about this choice. First, a buyer has the right to purchase the home once they have made the final construction and disclosures are completed. They are responsible for fixing up any problems. If they are found, the seller (the builder) has the right to either fix the issues or renegotiate the contract. Another pro of this choice is the ability to negotiate the price at the time and the length of the lease. Usually, the price increase is equal to a certain percentage of the final price. This means that as the construction is completed, the price should be close to what the seller is asking. If the person buying is a first-time buyer and they have no financing yet, they will have more money available to help them complete the project.

Finding an Encouraging Owner

All of this sounds great, but the house needs to be somewhat in pristine shape. This presents a few reasons for a buyer to turn the buyer loose. First, they may feel that the buyer is too stern about being careful. This is unfortunate, but it has been seen on too many of the homes being sold that the seller is not very willing to work with them. In this case, they may choose to sell to a chosen buyer that uses an older form of a Lease to Own contract. This may be difficult, but the new buyer can get the home inspections done and use them to make negotiations. Another advantage is that the new lease can go into effect immediately, so the homebuyer has time to get financing.

The advantage to the Seller

The seller has now made the final arrangements for construction. They are confident they are going to make money on their home sale, and so they are willing to extend the lease for as much as three years. This will give the buyer the time to repair their credit and strengthen their down payment to purchase. By being in the home for that extended time, the buyer moves in and has the opportunity to see what they can do and how much work needs to be done to fix the home up. The sale can go through very quickly as long as everyone is willing to work.

Deciding to go this route is not an easy choice. Both parties have needs and goals that must be met in the end. There are pros and cons to both sides of this equation. Losing the home could be a nightmare for the seller, but it may prove advantageous to the buyer. Since so many houses are sitting on the market for a long period, the seller probably sees more long-term potential than the buyer.

In summary, this is a helpful tool for people who are possibly experiencing circumstances that will lead them into home ownership before they get there. It can be a win, win for both parties. The listing agent will not have any commission lost on a non-exclusive deal, and the buyer can get the home of their dreams.

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