How to sell a house on a lease option

If you have a property that you would like to sell, but are not quite satisfied with the current market situation and rates, then what are your options? A lot of people choose to simply wait till the market condition improves. However, you have a more feasible option in selling your home on a lease option. A lease option can really help you generate some good cash via rental income as well as via sale of the home. In a lease option, you lease your property to a potential buyer and the buyer has the option of buying the property at the end of the lease term. There are many people out there who want to buy a home but are not quite ready to take the plunge yet. This option is perfect for such people. But what does it take from you to sell your house using the lease option?

Decisions and Work

If you are considering the lease options, then there are a lot of complex decisions to make and a lot of work to do. Although lease options sound like the best thing out there, they are not perfect for everyone. If you are looking to get all the money from the sale upfront, then it is definitely not for you. Also in the lease option you are still responsible for the home and will have to continue to pay property taxes. Are you ready for this? It's for you to decide whether this is the way that you wish to go. Now, that the decisions are passé, lets get to the work. You need to get buyers to you. So place advertisements in newspapers or a real estate website. Within a matter of time, you should be flooded with calls and leads. But do not get excited just yet. Your buyer is also going to be your tenant for the lease term and you definitely do not want a bad tenant as it means a lot of hassles for you.

Background checks and pre-qualification

Look for a tenant who has a reasonably good credit history. Note that I mentioned reasonably good and not excellent. The reason is that a lot of people look to buy a house on a lease option owing to a blemish on their credit score. They work on their credit score, improve it and then look for a mortgage loan to buy the home. So you might have to be slightly lenient as far as the credit history is concerned. But there are other things to look for as well. Check whether the potential tenant has a continuous source of income. Also it is a good idea to pre-qualify your lessee. You certainly do not want to end up ripping someone. So get in touch with a mortgage broker and discuss the prospects for both you and the buyer at the end of the lease term. Will he able to buy the home? What are his options of getting a mortgage?

Professional help

If you are as confused as a rat in a maze when you look at legal options and forms, then it is recommended that you seek professional help. Get in touch with an attorney who will help you with a seller's disclosure form. Remember, this is crucial. You need to disclose the condition of the house to the best of your knowledge. In addition to this form, you can also take the buyer for an independent home inspection. The lease contract also has the purchase price of the home and you may want to get it validated via an appraisal.

Final touches

You can also decide what option money to take from the buyer. Since this money is non-recoverable if the lessee decides not to buy the house, they are not very comfortable with it. But you can choose to take 2-4% of the purchase price. However, you also might want to be slightly lenient here. Apart from this, there are some other important things to look into like the term of the lease, how much of the lessee's monthly payment will be credited towards the option and making sure that you collect the payment each month.

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