Buyer Features and Benefits

If you are in the market to buy a home, you are probably aware of the advantages home ownership provides (tax shelter, appreciation, security, etc). If you are actively seeking homes for sale on a Lease Option agreement, you are either (1) a very smart renter, (2) a very smart real estate investor, (3) not ready to make a commitment, (4) cannot yet purchase a home through conventional means or (5) any combination of the aforementioned.

The Lease Option contract provides you with many features and benefits, but perhaps the most powerful one is the rate at which you accumulate equity. Compare any lender’s loan amortization schedule to that of a Lease Option contract and you’ll quickly see that the Lease Option contract wins hands-down — every time. Moreover, the buying power of a Lease Option contract can quickly and easily land you a home that you could only dream of buying the conventional way.

Here are some features and benefits for a tenant/buyer:

Faster equity growth: Equity accumulates much faster (five times or more!) than with conventional financing through a bank or lender. Rent money is working towards purchase: Every month a portion of your rental payment (typically $100-$500) is credited towards your down payment or off of the sales price.

Option money is credited towards purchase: When you sign a Lease Option contract, you will pay the seller an option deposit. This money is your vested interest in the home and will be fully (100%) credited to you when you buy the home.

Minimum cash out of pocket: When you purchase a home the conventional way, you must pay at least 5% down plus closing costs and prepaid fees. When you buy with a Lease Option, you only pay first month’s rent and a small option deposit. This will save you between 25% and 85% every time you buy a home.

Frequently no down payment at close: Since you have given the seller an option deposit and you have been receiving monthly rent credits, there will frequently be very little or nothing left to pay for a down payment at closing.

Profits from appreciation: Since the sales price is locked in before closing (as specified in your agreement), any increase in property value will mean that your equity (what you owe minus what it’s worth) is increasing in the home.

Possible sale for a profit: If you are allowed to sell (assign) your option (it will be in your agreement), you may sell it to a third party for a profit.

Increased buying power: When you buy a Lease Option home, you can put down as little as first month’s rent and a $1500 option deposit. Compare that to a typical bank or lender who requires 5-30% down plus closing costs and prepaids.

Credit problems okay: Qualification restrictions simply do not exist. You will be approved at the sole discretion of the landlord/seller.

No lengthy escrows or mortgage approvals: Your approval will be based solely at the discretion of the landlord/seller instead of a lender who can take up to a month (or longer) to render a decision.

Control of the home: You will be put in full legal control of the home for a specified period of time without actually having to own it.

No Taxes, Limited Liability: Since you do not own the home (yet), you will not have to pay property taxes and your liability exposure will be dramatically reduced.

Quick move in time: You can typically take possession of the home in a week or less, instead of conventional move in times of one to three months, after your offer was accepted.

Maximum leverage: You are spending very little money to control a potentially very expensive, and very profitable, piece of real estate.

Time: Before you actually buy the home, you will have 3-24 months (depending on your agreement) to repair your credit, find the best interest rates, investigate the home and research the neighborhood and/or schools.

Privacy: Your name will not be on the deed or in the public records until you exercise your option to buy.

Peace of mind: You will have full control of the home and can maintain or improve it however you wish.

Do I Need Credit?

No.  Credit is not necessary to own your own home.  However we do expect you to work on developing your credit.  Depending on your contract you will have between 3 and 24 months to develop the best credit you can.  Persons who have no credit are often the easiest persons to help develop good credit.

What if I have bad credit?

Bad credit does not exclude you from owning a home.  All we really need to see is progress toward reestablishing your credit and it can be done within 24 months.