BiggerPockets

Mr. Tenant Buyer,

If you are unable to get a loan at then end of the term, then we may be able to give you the option to renew for another year.

However, this is at the seller's discretion as you are expected to buy the home at the end of your lease. They may also require you to pay another option fee, as your initial option fee was based on one term.

There's also a chance where the seller will want to put someone else in the home that can close the deal and buy their home.

With that said, we can talk to the seller about giving you the option to renew in the event you can't qualify and we'll also work on getting your credit up to where it needs to be, so we won't even have to visit this scenario.

-J. Lamar Ferren

Stephen

One thing we stress is that the seller, my land trust, does not want to be a landlord and wants to sell the property.

If though the Tenant Buyer pays as agreed and is unable to acquire traditional financing ( which almost always happens) the seller would look at renewing the agreement. We also spell it out in the agreement that an additional non refundable option payment will be required.

One thing to keep in mind when doing LO. I only do them for 1 year, with me having the right to extend. The reason I don't go longer such as 2 or 3 years is this. If I get a TB who is always late, and we got to visit every month etc, I am "married" to them for that 2-3 years. If though we only use a 1 year agreement, a divorce is only 12 months away.

Hope that helps!

Tony