Lease-Purchase
Lease-Option or Rent-to-Own

Rent-to-Own / Lease Purchase / Lease Option

Bad Credit? - Strong Income? - Forced to Rent? - Want to Own a Home?

We will put you in a home on a 1 - 2 year Lease, with the Option to buy the home at the end of that time. Monthly credit of a portion of the Lease payment can be applied towards the down-payment on the purchase price. There is a reasonable option consideration (Option Fee) required to start the process towards home ownership (also applied towards the purchase price).
All terms and conditions are determined by the amount of the Option Fee.

You will be establishing a strong record of payment history while making the monthly Lease payments upon the due date, or before the due date. Reduced Lease payment if paid early.

How can you benefit from a Lease/Option contract on a home?

- Very low down payment - 3 to 10%% vs. 5 to 30% from the banks
- Occupy the property immediately
- Control of the property - upgrade the home and improve its value
- Some qualification necessary (credit problems can be ok) - depending upon credit history
- Option consideration is credited towards final purchase price
- One year to improve your credit to get the best financing
- Price may be limited to a modest appreciation, or locked in for 1 year
- Opportunity to check out the house and neighborhood for 1 year before you buy
- Save $$ towards extra down payment if needed

Overview of a Lease Purchase Contract

What is a contract?

A contract is an agreement between two or more persons (individuals, businesses, organizations, or government agencies) to do, or to refrain from doing, a particular thing in exchange for something of value.

What are the key elements to a binding real estate contract?

1. Offer and acceptance: Original signatures with no alterations to the contract. If the original offer is marked up and initialed by the party receiving it, then signed, this is not an offer and acceptance but a counter-offer. Any final agreement should be reduced to a final writing and signed by both parties.

2. Consideration: A bargained for exchange of something of value. Money is the most common form of consideration, but a promise to perform (i.e. a promise to pay) is also satisfactory.

3. In writing: A real estate contract must be in writing and it must:
    - Identify the parties: The full name of the parties must be on the contract.
    - Identify the property: At least the address, but preferably the legal description must be on the contract.
    - Purchase price: The amount of the sales price or a reasonably ascertainable figure (an appraisal to be  completed at a future date) must be on the contract.
    - Signatures: A real estate contract must be signed to be enforceable.
    - Legal purpose: The contract is void if it calls for illegal action.
    - Competent parties: Minors, mentally impaired, drugged persons, etc. cannot enter into a contract.
    - Meeting of the minds: Each side must be clear as to the essential details, rights, and obligations of the contract.

What is a Lease contract?

A lease contract is an agreement, usually written, between the owner of a property and a renter who desires to have temporary possession of the property. As a minimum, the agreement identifies the parties, the property, the term of the rental, and the amount of rent for the term.

In addition to the basics of a rental (who, what, when, how much), a housing rental may go into much more detail on these and other issues.

What is an Option contract?

An option contract is defined as "a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer."

Or, quite simply, an option contract is a type of contract that protects the individual making the offer (the offeree) from a seller's (the offeror) ability to revoke the contract.

What is a Lease Purchase Contract?

Again, it's very easy. A Lease Purchase contract combines a basic lease contract with an option to purchase contract, which creates a Lease Purchase contract.

Lease Contract + Option to Purchase Contract = Lease Purchase Contract

The tenant/buyer pays to the landlord/seller a nonrefundable option deposit that is applied to the purchase price of the home. The tenant/buyer then pays to the landlord/seller a  lease/rent payment to compensate the landlord/seller for the tenant/buyer's use of the property.

Rent payments are usually made on a monthly basis. A portion of that monthly payment can be applied to the purchase price and/or the down payment of the home, depending upon the amount of the Option Fee payment.

During the term of the lease-option contract, but before the option expires, the tenant/buyer has exclusive right to buy the home under the terms to which both parties have previously agreed.

 

Ephraim Enterprises, LLC

Call for Financing Details

Off.  -  407-287-5707