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Lease-Option |
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What is a lease- option? |
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A lease-option is helpful to someone who wants to buy a property but isn't quite sure. The otential buyer moves in as a tenant, paying rent. The buyer also pays an agreed-upon amount of money to buy an option, which is the right to purchase the property for a specific price within a certain amount of time. If the tenant decides not to buy, they remain simply renting for whatever length of time is specified in the lease. It all depends on the provisions of the contract, but in many cases if they don't buy, the money they paid to buy the option is not returned. Sometimes, if they do buy, it is applied to the purchase price. Sometimes part of their rent is credited toward the purchase price. Every agreement is different, and the whole thing is set out in a written contract at the start.
With a lease-option, the tenant is free to choose whether to buy or not. If the tenant does want to buy, the landlord-owner must sell. |
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Edith
Originally published on September 5, 2007 |
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