A lease option to buy means that you will be renting property with an option to buy the property at a future date. The price of the property should be fixed at the time of signing the lease. We see more and more lease-options during a slow real estate market. Sounds like a great deal for someone who doesn’t have that initial down payment that you need when buying a home from the beginning, or whose credit rating isn’t 100% at the moment.

This type of deal is one that attracts first time buyers, but the reality is that people who attempt to buy homes on a lease-option very rarely end up buying the home. The reason for this is often the same reason they chose to lease-option in the first place. Because they can’t qualify for a loan. Some people expect that after leasing a home for a few years they will be able to qualify. However, later they find out that they still do not qualify, when this happens you lose all the money that you may have paid up front plus the above market monthly rent payments that you have paid while leasing the home. Some find that they are now far less able to afford a home than they were when they signed the lease-option.

It is always far better to put your trust into your real estate professionals knowing that they will be able to place you in a home that is right for you.

This entry was posted on Thursday, July 17th, 2008 at 9:06 am and is filed under General, Buyers Advice and Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.