how does lease to own work?

Answer 1

Statistically, most "lease to own" rentals are never converted to actual home purchases. There are a thousand reasons that this is so, but the overwhelming one is that people enter into these contracts without doing their homework or consulting an attorney before signing on the dotted line.

There are legitimate deals out there, and it is entirely possible to eventually purchase a piece of property this way. A couple of tips ... make sure that the selling price specified in the agreement is not inflated. These agreements usually require that you rent for somewhere between two and five years before you are required to purchase the property. Most of the time, the owner will value the property higher than a current appraisal in anticipation of appreciation. Make sure that the neighborhood is stable and that housing prices are not falling when you actually want them to be rising.

There is no substitute for consulting an attorney before you sign a "lease to own" agreement. There are all kinds of pitfalls. What happens of the owner dies before you actually buy the house? Who pays for the maintainance of the property during the lease period, the owner may not want to put on that new roof when it is needed ... thinking that if he can just wait, the problem will become yours. Are you starting to get the picture?

Good luck with your search for a real estate deal.

Answer 2

It can vary depending on state....be VERY CAREFUL.

The basic consept is that you can't outright purchase a home at this time (for whatever reason)......you lease to own instead....your monthly rental payment or a portion thereof will be credited towares the purchase price of the house.

If you can afford to purchase, that is a MUCH BETTER option. Your money will be going towards something you own. This option can be better than just plain renting since your money (or some portion of your money) will go towards the purchase price.

I TOTALLY agree with the first response...get a lawer to review....it will be money well spent now and will save headaches later.

Careful attention will need to be paid to what "outs" are available to the owner (i.e., if the owner decides to sell to someone who can purchase now, are you just out of luck? or will the new owner be bound by your lease/purchase contract?

Answer 3

"Lease to Own" are pretty much all methods used to separate you from your hard-earned bread. At the very least take the contract to a good real estate lawyer and have him or her look it over for you. Be the best $150 you ever spent. There are a lot of scams running around out there.