Lease Option

We pay you an Option Fee up front, then rent your house with an agreement to buy your house at a fixed price at a later date.

With a Lease Option, Buyer pays an Option Fee to the owner. This locks in an agreed upon sales price. From this point forward the Buyer has the Option to buy the house at the agreed upon price whenever they can come up with the money. Buyer occupies the house under a Lease agreement, until the time that the buyer decides to exercise their option to purchase. Term of the Option can be 1 to 5 years.

There are several advantages to the seller using this method. The seller gets cash up front in the form of an Option Fee. The seller will keep this money in either case. If the buyer does not come up with the money to purchase the house before the end of the Option agreement, then the Seller keeps the Option fee as compensation for holding the house off the Market.

During the period of the Lease agreement (before the buyer purchases), you are just renting your house. The owner still owns the house, and all Rental laws apply. There are also usually no Realtor comissions.

However, as the owner, you have agreed to sell your house for a fixed price. If the value goes up significantly, that benefit goes to the buyer. There is the possibility that your buyer will not follow through, and you will get your house back.

Also If the buyer does buy the house, the Option Fee paid to the seller counts toward the sales price. In other words, the seller only recieves the total sales price. They do not recieve total sales price + an additional Option Fee above that.

The legal documents involved are an Option to Purchase and a Lease (or rental agreement).

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