Sell Your Property

What is a Lease Purchase? (Our Specialty)

A Lease Purchase is simply a lease agreement with the option for the tenant to purchase the property. The tenant/buyer makes monthly payments and within 12-24 months is obtaining permanent financing. The Lease Purchase allows you to have your mortgage paid for, plus have extra cash flow every month in many cases.

Seller financing means you act as the lender instead of a bank. The buyer makes agreed-upon monthly payments directly to you based on terms you both approve, often without relying on traditional financing.

A subject-to transaction means the buyer takes ownership of the property while the existing mortgage stays in place. The loan remains in your name, but the agreed payments are made moving forward under the structure of the deal.

You set a fixed purchase price (the option price) for a future date. Most tenant-buyers care more about the terms than negotiating the price, so they’re often willing to pay a premium for the opportunity. That means no back-and-forth, the price is agreed to upfront with no negotiation.

Absolutely nothing! There are no fees to you as the seller. Our compensation is built into the structure with the tenant-buyer, so it costs you nothing out of pocket.

The great thing about the tenant/buyer in a Lease Purchase, is that with the complete lease purchase system, they are intent on exercising their option. They realize that they are paying non-refundable money every month toward the purchase of the house. They don’t want to damage something that will be theirs. Often the tenant/buyer may make upgrades or renovations to the property. The difference between just a tenant and a tenant/buyer is that they are proud of their house and they care about it. It is similar to renting a car, vs. leasing a luxury car. If you rent a car, you are not too concerned if you hit a curb or something happens to it. You know you are going to return it and walk away. However, if you put down thousands of non-refundable dollars to lease an expensive car that could soon be yours, you are going to take VERY good care of it.

We are always marketing for tenant/buyers. We utilize a number of websites that we market to, directional signs and signs in the yard, as well as social media such as Facebook Marketplace.

If your home is already listed, we usually recommend keeping it listed while also offering a lease purchase option. This keeps your property exposed to traditional buyers on the MLS while also reaching tenant-buyers who typically aren’t searching there.

Keep in mind that traditional sales often involve agent commissions, usually around 3–6%. With a lease purchase structure through us, there are no fees to you as the seller.

We also work alongside Realtors when it makes sense and are happy to refer you to one if a traditional sale is the better fit for your situation.

The tenant/buyer is responsible for most maintenance. Plus, we always recommend a Home Warranty so that the repairs are covered. The only repairs you are responsible for are the major repairs such as structural, and roof, which fall under your insurance as a homeowner.

Every situation is different, but most tenant-buyers we work with can qualify within about 10–12 months. In many cases, they just need time to resolve minor credit issues or strengthen their financial profile.

We require tenant-buyers to actively work toward financing from the start of the lease term, which helps keep the timeline on track.

It’s also worth noting that many tenant-buyers already have strong income and credit, they simply need additional time for documentation, seasoning, or planning with their CPA before qualifying.

The tenant/buyers that are approved or that come to us are not what you would typically think of as renters. The people that come to us are great people with great jobs, but something has happened in the past that has caused them to feel as if they can’t qualify for a mortgage. Most of the people that come to us have been paying quite a bit to lease nice homes in nice neighborhoods for sometime. The family and kids are established in the neighborhoods and schools, and now the family is tired of leasing and ready to lease purchase, but they just need a small cushion of time.

This is highly unlikely, as the tenant/buyer has two major ties to the property. A financial tie, and an emotional tie. The financial tie comes from the fact that all of the money they have paid is non-refundable. This is normally thousands of dollars in most cases. The only way they will see that money again is if they close on the property. They would be better off to close on the property and then resell it themselves.

There are only three cases that we have come up with where someone may not purchase the property, and they are all pretty catastrophic situations.

Loss of or transfer of job
Death
Divorce

We have purposely put everything into place in our program to get the tenant/buyer to close on the property. From the non-refundable option fee payment, to the large rent credits, to immediately putting them in contact with a mortgage broker.

If for any reason the tenant-buyer is unable to close, we stay involved in the deal and handle the next steps. Depending on the situation, we may place a new tenant-buyer or step in ourselves to complete the purchase.

Our goal is to keep the process moving and protect your position while making the transition as smooth as possible for you.

More Questions?

Call Us 412-668-1700