Lease Purchase Advantages And Disadvantages Columbus Ohio Real Estate

A Lease-Purchase agreement has pros and cons according to each person. First of all, a Lease-Purchase agreement is a Basic Lease Contract with an Option to Purchase Contract added on to it. This simply means that the individual making the offer is protected from a seller’s ability to revoke the contract. This also is used when buyers lack some of the total down payment needed to purchase a property. The buyer will then pay the seller a nonrefundable deposit to compensate for the buyer’s use of the property. In the end, the buyer has the right to buy the home under terms previously agreed on.

There are many advantages of a Lease-Purchase agreement for a seller. First of all, if the market is down and the property is selling slowly, this agreement could attract many buyers. Also, a prospective buyer might add improvements and take better care of the property than a renter would. The seller will get a top sales price because many buyers are willing to pay a premium. They’ll also save thousands in fees and maintenance.

There are also advantages of a Lease-Purchase agreement for a buyer. This would of course allow a buyer time to store the needed balance of a down payment and pay off debts. The minimum cash out of pocket will be spent, and their equity will grow faster. This also increases buyer power and guarantees a home in the end.

There are disadvantages for a buyer and seller also. For a seller, there is no guarantee that the property will be sold at a certain time. The buyer is also agreeing to purchase in the future, so the price that seems good now might not be fair for the seller in a couple of years with the real estate market changing. The disadvantage of this option for a buyer is that the rent could be expensive because the option to buy is involved.  If the buyer is not able to purchase the property in the end, they will be out a lot more money than they would have been otherwise.

As shown, there are many advantages and disadvantages of a Lease-Purchase agreement.  If a buyer is certain they want to purchase a property, has a decent credit score, and is tight on cash, this could possibly be a good option to choose. Also, if a seller wants to be able to negotiate a price, attract many buyers, and save money on fees, this could be a good option.

Scott Marvin is a Columbus Ohio Real Estate Agent