Calculating the Possibilities
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Thinking about selling or buying a home using a lease-purchase agreement? Here are some tips from the experts:
For sellers:
While standardized lease-purchase and lease-option contracts are available from real estate agents, you may want to consult a lawyer to ensure that the contract gives you the protections you want.
Sellers will want the deposit and the rent credited toward a down payment to add up to 5 percent of the purchase price if a lack of savings is the reason the buyer isn't ready for financing.
The contract should address what happens if the tenants miss payments. Do they lose their opportunity to buy the house if they're ever in default? If they're in default at the end of the lease? If they missed more than two payments, even if they later made them up?
You may want to consider a mandatory arbitration clause for a lease-purchase because if the buyer doesn't go through with the sale, the cost of a lawyer to sue for damages may be more than what can be recovered.
