Is it a good idea to sell a house through a lease puchase?
We are trying to sell our house and there is someone VERY interested in it. They are trying to get approved for a loan, but are not sure if they will be approved. The realtor asked us if we would be willing to do a lease purchase. I’m not sure what this would involve or if it would be a good idea. Will this affect our credit when trying to buy a new house? And what are some of the risks involved?
Tags: lease purchase, realtor
June 4th, 2011 at 9:19 am
Basically you are renting to them, with their option to buy the home. If you do that, try to get a large security deposit, and apply some of the rent towards their down payment to buy. This way they will take better care of the home, and have a better chance in the future to buy it.
It’s not a bad idea for you, if you do not need the money to purchase your new home. It would not hurt your credit, if you continue making your payments, and other obligations (taxes, insurance, water bills, etc.)
June 4th, 2011 at 9:19 am
As a Realtor the rental business is booming, while the sales are slower. Many people that are interested in buying are considering the lease with option so that we can build their credit (or pay off some debts), while renting the home they wish to purchase. This can be good for the seller if the house has been a challenge to sell. As I do credit checks and landlord, employment verifications, each of the three are equally important. Review the information and make a rational decision, weighing the entire picture. Be sure to have a timeline as to when the option will expire! And hiring an attorney to review wouldn’t hurt either!
As for your credit, the bank view the property as income which works to your advantage. Again, their credit and verifications are the key to making a wise decision!