A rent to own Broward FL lease option is different than a lease purchase, a lease purchase binds both parties to the sale, where in a lease option rent to own contact the buyer has the option and the seller has the obligation to sell at a predetermined strike price.
As the name lease with an option to purchase says there are two events and one is not mandatory. In order to have a valid option the tenant/buyer must provide a Non refundable option deposit consideration for the option to purchase a Broward county home within a pre determined time frame. In other words buy the right to purchase at a later date at a per determined amount of money.
A lease option rent to own contact only binds the Broward County FL home seller to sell, it does not bind the buyer to buy. That is why consideration is important. Valuable consideration is approximately 5-10% option deposit money paid upfront, but there is no rule. The seller is bound to sell the home but being bound to sell also comes with many benefits, (Click here to see the benefits of selling a Broward County FL on a lease option)
The basic elements of a lease option contract as follows:
•· Tenant/Buyer purchases the option, the parties agree to what the cost of the option is.
•· The parties agree to a purchase price. It can be decided that the price of the Broward county will be pre determined in the option to purchase contract.
•· The length in residential Broward County Rent to own home for sale is typically 1-3 years.
•· How much the monthly lease payment is, whether any of the lease payment is to be credited towards the purchase price reducing the purchase amount.
•· Whether the Broward county FL tenant/buyer will occupy the property or whether the tenant/buyer has the right to sub lease or the right to sell the option to purchase.
•· An lease option investor may acquire a distressed property with a lease option and make improvements to the property. Then the Broward county investor can sell the option to a buyer that is willing to pay the new market value for a profit. It is a common financing technique with investors.
•· An example of this. The Broward County home Seller has a property that needs considerable amount of work. Retail buyers typically cannot get financing or have too much to choose from to bother with physically distressed properties. Broward Investors enter into a lease option agreement for let's say $80,000, rehabs the Broward home with about $20,000 and now the market value is approximately $135,000 the investor can sell the right to purchase for $35,000 and the new Broward county buyer would close with the original seller for $100,000
•· Another example of this would be a Broward County home buyer buys the same property and uses their own money to rehab and may use their rehab money towards the down payment. This allows the buyer to NOT have to come with a large down payment and rehab money.
Everything functions like a lease except the option deposit buys the tenant buyer to in which he or she must exercise the option to purchase.
During the term of the rent to own lease option agreement, the tenant makes lease payments to the landlord for the use of the property with the terms mutually agreed. At the end of the rent to own contract, the tenant buyer has the option to purchase the property outright; the tenant buyer must qualify for a mortgage before the option to purchase expires or the buyer will lose the option deposit money.
Reasons for using a lease option to purchase a Broward County home for sale.
1. Buyer is relocating and may need to sell a property in another area before the buyer can qualify to purchase the new home.
2. Buyer may have had some credit issues that have since been resolved and can afford the payment but needs to time to get permanent financing.
3. Buyer may have started a new business and otherwise qualifies and can afford the payments.
Rent to own in all of Broward County Florida
- Coconut Creek
- Cooper City
- Coral Springs
- Dania Beach
- Deerfield Beach
- Fort Lauderdale
- Hallandale Beach
- Hillsboro Beach
- Lazy Lake
- Lauderdale Lakes
- Lighthouse Point
- North Lauderdale
- Oakland Park
- Pembroke Park
- Pembroke Pines
- Pompano Beach
- Sea Ranch Lakes
- Southwest Ranches
- West Park