Am my cover in this contract?

2 Replies

The seller trying to sell a reo they purchase. But, with 90 days restriction, they going to do a Lease to own with me. I read through the entire contract, but will they refund my contract fee if they fail to deliver a title / deed?

1. Contract. This contract agreement is for the right of the Lessee / Buyer to obtain an

Option to Purchase on the property known as ------------

No rights vest in lessee until all the terms of this agreement have been

complied with.

2. Owner. The owner of the property ------- Trustee.

3. Lessees.The lessees are:

_______________________________________________________________________,

whose address is _____________________________________________________.

4. VESTING. One month before the scheduled end of the lease between these parties on

the said property (including any extensions as provided in writing by the Owner) and

provided the lease between the parties for the same property is not and has not been in

default, an Option to Purchase Agreement for the subject property will be granted in

writing and delivered to the lessees. The option will be valid for 30 days unless

extended by the owner in writing. The owner, or the owner’s agent, will provide the

payment history and credit references for the lessees in writing to assist in securing a

mortgage for the purchase of the property.

5. Property. The legal description of the property is:

------------------

6. No Credits. There is NO credit applied to the purchase price for improvements or

additions to the property. There is NO credit applied to the purchase price for any of the

rental amount paid during the term of the lease. There will be no payment for or

reimbursement issued for any repairs, improvements or additions to the property.

7. Contract Payment.

a. The fee for this Contract is $ 18,000.00, and is for the right to be granted an Option to

Purchase at the end of 1 year or in the time frame allowed herein. This fee is

NON-REFUNDABLE for any reason whatsoever unless the Seller is not able to deliver

marketable title to the Buyer at time of closing. ______________ Lessee’s initials

b. At the Time the Option is exercised, full credit will be given for the amount of this

contract fee payment on the lessees account on the HUD-1 form.

c. This Contract Payment is NOT A SECURITY DEPOSIT. _____________ Lessee’s Initial.

8. PURCHASE PRICE AND TERMS, CREDITS.

a. The Purchase price shall be $ 88,000.00, net to seller. The Buyer shall pay all

closing costs at the time of purchase. The Buyer shall receive credit towards

their obligations at the time of purchase for the following:

1. Initial Contract Fee Payment $ 18,000.00

2. Additional Non-refundable payments$ 0.00

3. Improvements / Repairs $ NONE

4. Other $ 0.00

9. Option Not Contingent. This Contract for the Option Agreement and the subsequent

Purchase itself is not subject to any financing contingencies whatsoever, including but

not limited to the Buyer not being able to obtain a mortgage of any kind, the appraisal

of the property being less than the purchase price, the credit worthiness of the buyer,

or any other factors involving the financing process. _____________ Lessee’s Initials

10. DEFAULT OR TERMINATION OF THE CONTRACT FOR OPTION. If the lessee does not

exercise the option, a portion of the Initial Payment (up to $2500.00 at the sole

discretion of the Owner) MAY be returned to the lessee if the agreement is terminated

prior to completion provided that:

a. Thirty day written notice is given.

b. All utilities are finalized and paid to date as of the termination of tenancy.

c. ALL furniture, belongings and refuse are removed from the property.

d. The property is returned in a clean, neat, and orderly condition, that there is no

damage, no missing items, all appliances are in working condition, and the

property is “rent-ready”, including fresh paint, clean carpets, etc.

e. A forwarding address and the keys are left with the Agent.

11. Severability. This contract cannot be cancelled independently of the lease by the

Optionor. The Optionee may cancel this contract at any time, but doing so will change

the terms of the concurrent lease to a month to month lease.

12. Early exercise of option. Lessee / Buyer may accelerate this contract, providing the

terms herein are met, at any time AFTER October 5, 2014, and before the end of the

contract without penalty.

13. Transferability. This Contract is transferable with the written consent of the owner

and with a transfer fee of 3% of the purchase price listed herein.

@Shuai Zeng  Honestly, I would suggest you run this contract by a local real estate attorney. I'm know that there's a lot of experienced investors on these boards, but at the end of the day, you're the one paying the bills. 

George

Thanks, I will have to show it to a estate attorney this weekend. Just want some insight of what you think of the contract? Since this is my first time Lease to Purchase.