Lease Purchase Agreement is becoming one of the accepted ways to sell homes in United States. Those who are facing difficulty in selling their real estate properties or trying to collect cash in order to make another investment often prefer this method. But before you opt for this particular option, you need to understand all the pros and cons related to it. The Lease Purchase Agreement option can be defined as a combination of the finance and real estate rentals techniques. The property can be given on lease for several months or years. After the lease period or even during it the tenant is given a choice to buy the property at a price that both the buyer and tenant agree with.
Lease Purchase Agreement has been considered the fastest method to sell properties. This is also a comparatively less expensive way to sell or buy properties according to most of the investors. The best part is that the buyers are not required to kowtow to the conventional methods of underwriting and abide by the related guideline. This is equally beneficial for the seller as well. They need very little documentation which reduces the complexities involved in selling properties. The sellers in most cases do not much bother about where the down payment amount is coming from. Cash payments are allowed in this situation.
The other reason why the buyers prefer the Lease Purchase Agreement is because here they need quite a small amount of cash to pay up-front. At the same time the seller gets the regular flow of cash from the tenant using which he can pay off the taxes and other maintenance charges of the property. On top of that the tenant keeps the property well-maintained because he is the one who is going to own it later on. Hence this seems a mutually beneficial deal indeed.
The Lease Purchase Agreements are slightly different from the lease-option deeds. In the lease-purchase the tenants are obligated to purchase the property after the lease period is over. But when it comes to lease option, there is no obligation as such. Hence the Lease Purchase Agreement makes a much preferable option to the sellers.
But when one tries to get the Lease Purchase Agreement, he has to come across one major difficulty that is the real estate agents. But if you look at the Lease Purchase Agreements they have several advantages. They have quite high demands from the potential buyers which is superb indeed. There is no compulsion of paying up-front as well as less paper work is required which enhances the demand of this deal.
The quality of buyer that is obtained for a property from this sort of agreements is much better than from direct deals. The longer terms attached to the agreements make their much more profitable than other available options. The buyers can try out their real estate properties before they actually purchase it. These are few of the many reasons why Lease Purchase Agreements are gaining popularity among American property buyers and sellers.