Tips for Lease Option Contracts
Here are some tips for sellers and buyers when negotiating a lease option. It always helps to consult an attorney to make sure everything is legit.
- Down payment - sellers can negotiate high down payments and buyers can negotiate low. This amount will go towards the purchase of the home upon executing the purchase contract or is non refundable if the purchase contract is not executed.
- Option price - sellers can negotiate a high monthly option price that goes towards the purchase of the home. Buyers can negotiate low option prices. Again, this amount is non refundable if the purchase contract is not executed.
- Term - Negotiate a term that is convenient.
- Extensions - If it makes sense, negotiate extensions.
- Trash and leave - If a buyer gets turned down for a loan or for whatever reason cannot execute the purchase contract they may be soured. It is important to negotiate a clause that protects the seller in case the buyer trashes the home and leaves. Consult an attorney to make this legal and enforceable.
- Make buyers responsible for maintenance - Absolutely without a doubt make the buyers responsible for maintenance.
- Get a home warranty - Get a home warranty, always a smart idea.
- Have insurance - Always have home insurance, buyers are recommended to have renters insurance during the lease term as well.
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