Lease with option what is the benefit?
Hello BP community, I have a property listed and had an interested party approach me with can I rent to own?, can I do a lease with an option? etc, honestly, I was unprepared to answer this since I had not considered this strategy and since have become curious I would love some feedback regarding this practice, my understanding is as follows:
- Option to purchase on a lease is typically 1% of the value (non-refundable, but credited to down payment if the purchase goes through)
- rent is increased by 10% for forced savings (non-refundable, but the amount in excess credited to down payment if the purchase goes through)
would greatly appreciate direction and resources to aid in making this transaction a success, my questions start at:
- should I pay for an appraisal now and add X% to that for the future purchase time frame I.E. 250K Appraised + 3% for every 12 of the lease term or
- should the price be set at the time of purchase (who pays for the appraisal)
- I have an agent listing this now, how would the agent make his commision on a scenario like this (the agent did not participate in putting this deal together) Should the agent be involved?