Ask any seller and they’ll probably tell you there is no advantage to the current market conditions. There may be some truth to their statement, but can you turn this market to be an advantage to both buyers and sellers? The answer is yes!
As we discussed previously, now is the best time to buy and many people may be thinking “how can I get out of my current home and upgrade to a newer or bigger home?” Although we always think a straight sell and purchase is our only option, there is another route to consider-the lease agreement with option to purchase contract. Let’s look at some of the scenarios where this might be something to consider using.
You’re a seller and haven’t had many people come look at your house let alone received any offers. You’re also concerned about getting the value of the property back during the sale. Unfortunately, with the new mortgage requirements, even the few people who have looked and might be interested in your home can’t qualify for a loan. A lease-option contract will allow a buyer to move into the house under a lease and includes a clause for them to purchase the home within a specified time period. It is best to establish the purchase price of the home during this initial contract negotiation; this allows both parties to know exactly what they are agreeing to and what their costs will be. This also allows you, the seller, to purchase your new home while having the costs of your old home covered.
The lease-option contract provides benefits to both the buyer and the seller. A buyer is able to get into a home and begin to build some equity in the property. This is done by a portion of the lease price being applied to the purchase of the home. The buyer also begins to maintain the property as if they are the owner, so these expenses are not longer carried by the seller. Because the seller still owns their original property, they continue to enjoy all the tax benefits they previously did. These are just a few of the benefits to both sellers and buyers. Remember, it is always wise to consult an accountant and/or an attorney when trying to understand tax benefits and contracts.
To learn more about a lease agreement with option to purchase, contact a Realtor. They are a great source to better understand if this is the right choice for you. To search for a home or find a realtor, visit Exit Realty Mountain West here. We look forward to working with and serving you.
