Should we sell our home on a Lease-Option?
A Lease-Option or Lease-Purchase is an agreement where you rent your home to a potential seller who agrees to buy the house at a predetermined price at some point in the future.
There are instances when selling your house on a Lease-Option agreement makes sense, especially in a buyer’s market like we are currently experiencing. Offering Lease-Option terms on your property makes the purchase of your house obtainable for a whole new market of potential buyers. If you have already bought another house, a Lease-Option can ease the burden of paying two house payments by providing rent income. Additionally, this type of deal usually allows you to get a higher price for your home when the Option or Purchase is exercised.
Of course, there are risks. People looking to purchase on a Lease-Option often have credit issues that keep them from qualifying for a mortgage. This also means that a relatively low percentage (about 50% in our experience) of people actually close on the sale of the house. When you sell a home this way, you become a landlord and if the house does not close, your tenants often leave the property in worse condition than they found it.
If you’re considering selling your home on a Lease-Option, there are many other considerations to take into account that could mean the difference between a smooth, profitable transaction and a nightmare money-loser. So make sure that you get advice from a real estate professional who is experienced in these kinds of deals.