There are several ways to become homeowners. For some people who want more flexibility with renting and purchasing properties or buying a new home, you may consider utilizing a lease purchase agreement. In many cases, leasing may be necessary for buying a house which otherwise would never happen. The agreement is popular because it allows people to test drive a home without making a big investment within a short amount of time. Of course, lease purchases have drawbacks, as in any home-buying contract.
Also called lease-to-own contracts, lease options, or lease purchase contracts, lease purchase agreements are often mistaken with the term “lease agreement.” This agreement allows a buyer to occupy the house for sale for a period of time until the sale is completed. The arrangement may assist both parties in addressing their goals and needs for transactions and their particular situation.
A lease purchase agreement usually combines two separate agreements: one on the lease agreement and one on the sale of a lease. Contracts may have clauses in the contracts where the clauses are mutually exclusive. This means a default of any of the provisions of your purchase contract will cause the contract to be broken automatically.
Lease purchase agreements work by using rent-to-own principles that are structured accordingly. Rent-to-own means the purchaser rents the property for later purchase and progresses to ownership. In most cases, rent-to-own buildings are more rentable than the fair market value. The additional portion is used for a downpayment on the property. A lease purchase is composed of two distinct contracts – usually the kind of agreement that includes what has often been called cross-default clauses – where a breach of any of these agreements results in an automatic breach of the other agreements. Typically, as the tenant-buyer has agreed to purchase the property at the end of the lease as part of a lease purchase, the leasing will usually require the tenant-buyer to pay maintenance expenses which is generally the obligation of the landlords. Try this free lease purchase contract from Fill and take the guesswork out of purchasing a property from your landlord. The template is straightforward and easy to use; just fill out the blanks with specific information about the property, lease terms, purchase price, and more. Make sure to review the terms and conditions with a real estate lawyer before finalizing any contract. Happy house hunting!
