What are lease options and how do they work?

For Lease Option Homes In Michigan

A lease option is an agreement between a buyer (that’s you) and a seller hopefully us Kaper Properties, Inc. but it could be anyone. In the lease option agreement the buyer signs a document which give him or her an exclusive right to purchase a property or asset before some future date at an agreed to amount. The lease option agreement binds only the seller, the buyer has a choice to make this purchase or not. Because or this the buyer usually pays the seller a fee. That fee is called the lease option fee and is normally non refundable that is to say the buyer does not get this money back even if they choose to not buy the asset. Lease options are common among buyers who would like to own a home but do not have enough money for the down payment and the closing costs. A lease option may also be attractive to buyers who are working to improve bad credit before approaching a lender for a conventional loan. A lease option may also be a way for the seller to move a property in a slow market. When a seller agrees to give the buyer an exclusive lease option to purchase a property, the option price is usually determined at the outset, but not always, and the agreement states when the purchase should take place say, six months, twelve months or maybe 18 months down the road. Oftentimes a portion of the lease payment is used to make the future down payment. This is called the rent credit. Seller advantages include earning above-market rent, retaining all the property income tax deductions during the lease-option period, and attracting buyers who will care for the property because they are going to own it. Buyer advantages are smaller down payments, fewer credit checks and the ability to live in the property before a final decision is made to purchase. Please visit our home page to lean more about lease options and how we can help you purchase your dream home with this valuable financing tool!