Lease Option and Rent to Own Forms
Once you find eager rent to own tenants, you need to have your lease option and rent to own forms ready to go. One set of lease option forms will not work for every state in the country because real estate laws vary by state. You can contact me for a draft version of my lease option forms for your real estate attorney to review. However, in all probability your attorney has a version of lease option forms that better match your state laws.
Get Your Lease Option and Rent To Own Forms Sooner Rather than Later
Tired of not being able to sell a house in today's slow market? How would you like to sell for above market price? Rent it for above market rent until it does sell? Put some money in your pocket every month after paying the mortgage? And collect a few thousand nonrefundable dollars when rent to own tenants first move in?
If those options appeal to you, it's time to get your lease option forms finished and start looking for rent to own tenants. If you can't sell in this market, your next option is putting rent to own tenants in place. Actually, in my opinion, selling via rent to own is the way to go every time. All of the benefits I just described to you are documented on your lease option forms. The above market sales price (of course you don't tell the buyer that) is recorded on the lease option forms and secured by the option fee. The option fee assures the tenants they have X number of months to exercise their option to buy at the agreed to price.
Lease Option Forms - What They Mean to You
When many sellers first consider a rent to own sale, they are most interested in the option fee. The good news is, regardless what happens down the road, you keep the option fee. If the buyer closes on the home, it applies towards the purchase price.
If the buyer elects to not purchase the home, the option fee is forfeited and remains yours. Either way, you win. If you were to just rent the home, then the tenant would put down a refundable security deposit. The option fee is different from a security deposit. A security deposit is owned by the tenant and can’t be used by the owner, except for repairing damages, unpaid rent, and other provisions as mandated under state laws.
On the other, the option fee provides the tenant the flexibility of locking in the sales price today without making the purchase for another year or so. It's all about the house sale and has nothing to do with the rental agreement.
You want to make sure all of this is recorded on the lease option forms. I strongly recommend you have your rental agreement separate from your lease option forms.
You'll learn everything you need to know about working with potential buyers in my book Lease Options and Subject to Deals including how to properly complete the lease option forms.
For instance, if you do a credit check on one person contemplating signing lease option forms, you legally must do a check on everyone considering your lease option forms.
Rent to own Coaching - Feel free to share this post, comment, or ask questions about any aspect of the lease option forms . If you want to learn more about rent to own coaching, check out my Facebook page at www.facebook.com/WendyPatton or you can learn more about the lease option forms from my free book and video training.
Please avail yourself of these free real estate investing resources:
- Lease Option Contract and Working With Buyers
- In a Sandwich Lease You Are Still a Landlord
- How to Do a Rent to Own That Works Well
This entry was posted on Tuesday, April 24th, 2012 at 6:55 pm and is filed under Lease Option - General Stuff, Lease Option Training / Rent-to-Own Training for Home Sellers, Lease Option Training / Rent-to-Own Training for Investors. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.