Should You Have A Lease Option Agreement Availablle When Selling Your Home?

I've discovered that most people believe there are only two basic ways to get into a house, renting or buying. But when I'm thinking about how to sell my house sometimes I consider another option, and it's called a Lease Option Agreement. If that seems like a good fit in a certain situation I share some facts , the same things I'm sharing with you in this article, to inform the potential buyers that there may be another way for them to move into my house.

Usually they are pretty interested in what I have to say. Real estate brokers are not fond of lease option agreements because sometimes they lose out on their commission, so it's a good idea to ask your attorney for a form to use if you are considering this alternative way to sell your house. Nothing I'm sharing here is legal advice of course, I'm merely telling you how I've used lease option agreements in the past and how you might use them, too. I doesn't matter if we talk about a stock option with a corporation or a lease option agreement on some real estate, what they have in common is the word "option."

Both corporate stocks and real estate can be sold and purchased as an "opportunity." This is how it works - an option is basically an opportunity to buy something tangible, such as a share of corporate stock or a house, at a specified price on or before a specified date. Let's repeat that last sentence again, "…an option is basically an opportunity to buy something tangible, such as a share of corporate stock or a house, at a specified price on or before a specified date."

I think about a lease option agreement in a simple way, and that's how I explain it to potential buyers who are getting interested in a house to the point that I begin seriously considering how to sell my house to them: I give the prospective buyers a lease agreement to sign that is set up for the term of a year for a specific monthly rental amount. The lease agreement includes an option, which is basically an opportunity to get the privilege of having "dibs" on the house, which means that no one else can show up and buy the house out from under them. The buyers know how much their payments will be each month, and they know an exact date they have to tell me if they are going to buy the house or not.

If they don't contact me in writing and "exercise their option" which means they agree to buy the house, then they lose their option. They no longer have dibs. The "option fee" is a dollar amount paid when the lease is signed as a one-time fee, or it's added to the monthly payment stated in the lease agreement. An option fee is not refundable if the people choose not to exercise their option.

A lease option agreement gives them an opportunity to purchase their leased home at a negotiated price by a certain date, and after that date the arrangement ends and they lose all the money they put towards the option. A lease option agreement gives me and it gives my tenants one more way to go when we're talking about how to sell my house to them.


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Understand how easy it is to sell a home quickly at Leo Kingston's site. Leo is based in OKC and has been buying houses for cash for more than Twenty years. His 18002SellHomes business offers homeowners a simple way of selling their property without broker service fees or loan company closing costs.