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What Are Lease Option Contracts?

December 13, 2011 | Comments: 0 | Views: 197

A lease option contract is a type of contract in real estate that says that a piece of property will be leased to a buyer and at a later date they will have an option to buy the property. This type of option gives the buyer a chance to buy the property as opposed to being required to buy it.

Lease options usually occur during times when the market is slow. They are also great choices for people who can't afford loans and to those may also not have the appropriate funds for down payments. When a buyer opts for this type of lease, they are required to put down option money. If at a later date they decide not to purchase the property, the seller then has the right to keep the money.

When you decide to enter into a lease option contract, you will face several decisions. First of all, you will need to decide with the seller how much your monthly payments will be. Also you will need to negotiate how much of the option money will be put aside for a down payment and make the decision as to who handles the closing cost.

Before the date of expiration, you will also need to be sure that you qualify for the home loan before the contract expires. Prices of houses can fluctuate as well, and this is very important to keep in mind.

This type of contract does provide buyers with some favorable options. A lease option contract gives buyers options to slowly ease into owning their own home. It also allows future homeowners to buy the home of their dreams. A home that would otherwise not be an option for them becomes a reality. Sellers benefit from this kind of contract as well. When they choose to offer a lease option, they have a good opportunity to sell their home when the real estate market isn't doing so well. They also have the ability to sell their home at a higher price than they could in a normal home selling transaction.

Before entering into a lease option contract it is of utmost importance to be sure that you are dealing with honest professionals. Experts in the field can provide you with the correct information to ensure that you get the best deal possible. If you take the time to research your options, a lease option contract can be a great choice for any future home owner.

Get to know more on lease option? Please visit our website...

Source: EzineArticles
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