Lease-Option Sale Beats No Sale at All
For sellers, builders, and real estate professionals, a lease-option sale is usually better than no sale, and can work for properties in all price ranges. Lease-options can work especially well in markets with an oversupply of homes or condos for sale.

A lease-option is similar to a new-car lease, in that the renter has the choice of buying the property or not by the end of the lease term. Unlike a lease-purchase, which requires the tenant to buy the property within a year or two, a lease-option doesn’t force the tenant to buy.

For both the tenant and the owner, the amount of the monthly rent credit toward the tenant-buyer’s down payment is the key to a successful lease-option.

Here’s a summary of other lease-option perks:

• Upfront option money is smaller than typical home-purchase closing costs.
• The rent credit outweighs lack of mortgage interest and property tax deductions.
• The buyer can “try on” the house or condo before buying.
• The option purchase price is locked in for the lease term.
• The buyer can move in within a few days after signing the lease-option.

Source: Inman News, Robert J. Bruss (02/03/07)

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