Should I Purchase My Atlanta Area Home As A Lease Purchase?


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Lease Purchases


Many Lease-Purchase homes are often advertised by sellers in local newspapers, on for sale signs, the internet and other media and potential home buyers often seek them out in their strong desire to own their own home.


Let’s look at the potential lease-purchase from a buyer’s and seller’s perspective.


As a purchaser if you did not initiate the lease-purchase offer or someone who represents (i.e. agent, attorney etc,) you did not initiate it, the offer will more than likely not be in your best interest. This is usually what occurs when a potential home buyer sees a lease-purchase ad in the various media and respond to it.




They usually have no idea of the home buying or financial planning process and want to own a home at all costs.




They will be easy prey for a savvy home seller and/or their representative because they are not fully aware of the lease purchase process and they are not in proper position to negotiate the terms and price.


Sellers and/or their representatives normally will structure the sales contract in a manner that will maximize the terms and sales price to their benefit and minimize the terms and sales price to your (purchaser’s) benefit.


Those are some of the reasons I dislike lease-purchases from the buyer’s perspective. In addition at the end of the lease purchase you will be locked in to that specific property at the specific price that you agreed to, regardless of market conditions. If prices of homes have risen or fallen you are locked in.




The purpose of a lease purchase is normally to buy the purchaser time so that they can get their credit to a level where they can qualify for a loan at a good rate.




Once you qualify at a good rate you have the potential to purchase ANY property, so why limit yourself to one particular house.


Most lease purchases offered through Multiple Listing Services where you have to deal with real estate agents are usually for one year and usually not more than two, as real estate agents are concerned about their commission and will normally not accept an offer beyond that period.


Other seller’s who offer lease purchases without the assistance of an agent may offer a longer lease-term than three years but they will more than compensate for the longer term by structuring the terms and sales price in their favor.


If you must purchase a lease-purchase it is imperative that you draft the terms and sales price yourself or with the assistance of a competent real estate agent or other professional. A better option if you feel you really want the property and don’t want to lose out may be a lease option purchase where you are not locked in to that purchase and you can opt in or opt out. 


Again structuring the terms and purchase price is key so make sure you utilize competent professionals.



An even better option (and one that I like) for you may be to continue renting and get your credit score and reports to a level where you qualify for an FHA or Conventional loan at prevailing market rates (competitive interest rate) and then purchase the home of your choice with no lease purchase premium included or a lease option fee included.


Again, generally you want to make sure that you are pre-approved as opposed to pre-qualified, you have a six month emergency fund or other compensating factors at work and you are properly positioned to purchase.


By being ready, willing, and able to purchase you and your agent should be able to negotiate a better deal in most cases than if you were to go the lease-purchase or lease option route.



About This Article:

 

The above article was written by Thomas (TJ) Underwood.   Thomas (TJ) Underwood is an active real estate broker in the state of Georgia and is the writer behind The Wealth Increaser, Home Buyer 411,  Home Seller 411, The 3 Step Structured Approach to Managing Your Finances, Managing & Improving Your Credit & Finances for this MILLENNIUM and CREDIT & FINANCE IMPROVEMENT MADE EASY—FREE GUIDE. 

He is the creator of TheWealthIncreaser.com where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner.  He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. 

You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page. 

You can also get other highly relevant tips on "living your life more abundantly" and possibly earn revenue at the same time by linking to TheWealthIncreaser.com.



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Thomas (TJ) Underwood has been providing financial advice as a tax practitioner since the mid 1980’s and began his financial planning career (while earning a Bachelor of Science Degree in Business Administration/Finance/Marketing), in Detroit at Wayne State University.  From 2010 up to the present he continues to provide visitors timely personal finance and wealth building advice and articles—including real estate advice—on 3 sites that he has created since 2010. 

Even though he is an active real estate Broker in the Atlanta Metropolitan area, he continues to blog consistently to help visitors and those who desire lasting financial and life changing success the opportunity to change their life for the better in a more efficient way. 

You can learn more about him and gain access to all three sites that he has created by going to Who is the creator of TheWealthIncreaser.com page.







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