Sometimes sellers give the option of money to their real estate agent as the full payment of the commission. Brokers are not always involved in exercising leasing options or executing leasing contracts, and you will probably still need a real estate lawyer, even if you have retained the representation of the real estate agent. Agents are not lawyers, and they cannot give you legal advice. Get all the information and do your due diligence, just like you would with a regular sale, including this: Remember: a leasing option was never the first choice for the owner, and their finances are probably a little precarious if they were placed in this position in the first place. You rely on your cooperation as long as the contract persists, which places you risks like: at the end of the rental period, the tenant/buyer has the option to buy the house. The lump sum and rental credit from the original deposit will only be released to the buyer in the form of a down payment on the house, if the tenant/buyer decides to buy it. The tenant/buyer is responsible for guaranteeing the mortgage required to complete the purchase of the house. In a standard lease-sale agreement, both parties agree on a rental period during which the rent is paid and conditions of sale at the end of the rental period, including the sale price. Often, the contract is divided into two parts, one being the duration of the credit and the other a sales contract. The rental agreement explains what responsibility the tenant/buyer and lessor/seller assumes during the lease. This contract also includes the option fee and how much the monthly payment is credited on the down payment for the purchase of the house at the end of the lease.
Today, options for purchase, option leasing and leasing contracts are three separate financing documents. Although they are similar, they differ in finer details because the differences are state-specific and not all states have identical laws. Talk to a real estate lawyer before entering into one of these agreements with a seller to make sure you understand the effects. As a general rule, this type of agreement provides for so-called “cross-refer” provisions to ensure that a violation of one agreement results in an automatic violation of the other. Since the tenant buyer has contracted to purchase the property as part of a rental purchase, the rental agreement often provides that the tenant-buyer for maintenance is repairs and repairs that are typically required by the owner. If you are a landlord stuck with a home that is not sold and you have to move for some reason, or if you are a real estate investor with several properties, a rental purchase could be a viable option to nail a sale and get a good price for your property.