If you have decided it's time to purchase a home but are renting because of financial circumstances, you may want to consider talking to a realtor about a lease purchase option, Short for Lease with Option to Purchase Contract. It merges the fundamentals of a traditional rental agreement with an exclusive right of first refusal option for later purchase of a home. Here's how a realtor can assist you with a lease option purchase, and what you can do to help reach your goal of home ownership.
Why Not Just Look At Rental Property Sites On Your Own?
Sites that offer apartments and homes for rent do not always include properties whose owners are willing to consider a lease purchase option. Scouring pages of rental homes wastes your time when a realtor is able to do it for you. With access to the MLS, or Multiple Listing Service, a realtor can view properties not listed on a traditional "For Rent" site. He or she can find homes for rent that you might purchase at a future date using the lease purchase option.
How Can A Realtor Help Me?
In addition to finding potential properties, your realtor will advocate for you with the owner of the home you wish to purchase down the road, usually within 3 years. He or she also has access to state-approved contracts and forms, and can negotiate your lease option for you, such as monthly payment amounts and final purchase price.
What Happens After I Move In?
Once the lease option contract is negotiated, the purchase price is locked in. This means that while you live in the home, the agreed purchase price does not change despite market fluctuations.
Your monthly payment amount also stays consistent. You may even earn credit toward equity purchase by paying a little bit more each month. By paying rent through a third party, ACH debit or auto debit, your credit line will reflect this. Then, when it is time to refinance and purchase the home, your bank can witness your good payment history.
While you live in the home, you can also show good faith toward refinancing by taking care of repairs and maintenance in the home. Even though you are still renting, you do have right of first refusal, so it makes good sense to take care of your property. Here are some simple things traditional renters choose to skip that you should practice:
- Change those furnace filters regularly
- Maintain the landscaping with pride
- Paint the interior as you prefer