Advantages of Lease Option to Sellers
The real estate market not only across the United States but all over the world is suffering a decline. Sellers and buyers alike have their share of the slowing down of this industry. It is harder now for sellers to sell their homes and buyers to get mortgages. Before this phase, it was easier to buy and sell houses. But at this current state, in order to survive in this market one must be creative.
One of the creative ways in this market is what we call the lease option or lease with option to purchase. How does this work? This happens when both parties agree to an option that gives buyer the right to purchase the home during a period while renting the house from the seller. The buyer has two options at the end of the option period, either he can exercise his right to purchase the house or he may opt not to buy the house which forfeits the option fee. So while there is this option, the seller is not allowed to sell the subject house to another person within the period of this agreement.
So what do we get from this? What are the benefits we can get from choosing this lease option? The following are some of the benefits the seller can take advantage of when selling on a lease option.
- Sellers get to collect rent from the tenants. Instead of directly selling the house in a conventional way which would at some point leave the house vacant while you are waiting for potential buyer to buy it, with this lease option you can collect rent from your tenants while the house is not sold to them yet.
- Security to sell the house or commitment to purchase your house. When at the end of the period the tenant decides to not purchase, the option fee is forfeited.
- It allows you to be at the top of the competition
- Even when the market is down, you can still sell your house at the end of the option period.
- More often that not, selling on a lease option gets the seller a better offer or a higher purchase price