The most common reason people sell their homes through lease-to-own options is to have a way to sell the house when the house will not sell. If you cannot find a buyer for your house but do not want two mortgage payments, selling through a lease to own option is a great way to protect yourself financially. If this is something you are interested in, here are several things you need to know about the process of selling your house through this method.
Keep the loan
If your goal is to sell this house so you can buy another house to live in, you should make sure that you understand that you will have to keep the loan on your existing house through if selling through a lease to own option. The main reason this is important is that you should realize that getting another loan to buy a house might be more challenging, mainly because you will already have one mortgage loan. A mortgage lender might be hesitant to issue you a second loan, due to the increased level of risk the lender takes on when doing this.
Get a down payment and establish a high-enough payment
Secondly, you should make sure that you collect a down payment from the person buying your house, and this down payment should be high enough that it protects you. If the person buying your house fails to follow through with paying you for the house, you keep the down payment, and you also get the house back. This down payment should be enough to cover your expenses and repairs the house needs if this happens.
The payments the buyer makes to you are like mortgage payments to the buyer, and you should make sure that they are high enough to cover all the expenses you have related to that house. This includes the mortgage you must pay each month for the house, the insurance you keep on the house, and anything else you may have to pay.
Have a clear, thorough contract
Finally, if you are going to hand over your house to someone through a lease to own deal, you will need a good, clear contract for the deal. The best way to get a good contract is by using real estate attorney services. Your attorney will make sure the contract fully protects you, and you will need to get the contract signed by the other party before handing over the keys to your house.
Share16 July 2019
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