| Tenant/Buyer Features & Benefits | | | | usually locked in before closing (as specified in your |
| If you are in the market to buy a home, you are | | | | agreement), any increase in property value will mean |
| probably aware of the advantages home ownership | | | | that your equity (what you owe minus what it's worth) |
| provides (tax shelter, appreciation, security, etc). If you | | | | is increasing in the home. |
| are actively seeking homes for sale on a Lease to | | | | * Possible sale for a profit: If you are allowed to sell |
| Purchase agreement, you are either (1) a very smart | | | | (assign) your option (it will be in your agreement), you |
| renter, (2) a very smart real estate investor, (3) not | | | | may sell it to a third party for a profit. |
| ready to make a commitment, (4) cannot yet | | | | * Increased buying power: When you buy a Lease to |
| purchase a home through conventional means or (5) | | | | Purchase home, you can put down as little as first |
| any combination of the aforementioned. | | | | month's rent and a $1 option deposit. Compare that to |
| The Lease to Purchase contract provides you with | | | | a typical bank or lender who requires 5-30% down |
| many features and benefits, but perhaps the most | | | | plus closing costs and prepaids. |
| powerful one is the rate at which you accumulate | | | | * Credit problems okay: Qualification restrictions simply |
| equity. Compare any lender's loan amortization | | | | do not exist. You will be approved at the sole |
| schedule to that of a Lease to Purchase contract and | | | | discretion of the landlord/seller. |
| you'll quickly see that the Lease to Purchase contract | | | | * No lengthy escrows or mortgage approvals: Your |
| wins hands-down -- every time. Moreover, the buying | | | | approval will be based solely at the discretion of the |
| power of a Lease to Purchase contract can quickly | | | | landlord/seller instead of a lender who can take up to |
| and easily land you a home that you could only dream | | | | a month (or longer) to render a decision. |
| of buying the conventional way. | | | | * Control of the home: You will be put in full legal |
| Here are some features and benefits for the tenant | | | | control of the home for a specified period of time |
| buyer: | | | | without actually having to own it. |
| * Faster equity growth: Equity accumulates much | | | | * No taxes, less liability: Since you do not own the |
| faster (five times or more!) than with conventional | | | | home (yet), you will not have to pay property taxes |
| financing through a bank or lender. | | | | and your liability exposure will be dramatically reduced. |
| * Rent money is working towards purchase: Every | | | | * Quick move in time: You can typically take |
| month a portion of your rental payment (typically | | | | possession of the home in a week or less, instead of |
| $100-$500) may be credited towards your down | | | | conventional move in times of one to three months, |
| payment or off of the sales price. | | | | after your offer was accepted. |
| * Option money is credited towards purchase: When | | | | * Maximum leverage: You are spending very little (or |
| you sign a Lease to Purchase contract, you will pay | | | | zero) money to control a potentially very expensive, |
| the seller an option deposit. This money is your vested | | | | and very profitable, piece of real estate. |
| interest in the home and will be fully (100%) credited to | | | | * Time: Before you actually buy the home, you will |
| you when you buy the home. | | | | have 3-24 months (depending on your agreement) to |
| * Minimum cash out of pocket: When you purchase a | | | | repair your credit, find the best interest rates, |
| home the conventional way, you must pay at least 5% | | | | investigate the home and research the neighborhood |
| down plus closing costs and prepaid fees. When you | | | | and/or schools. |
| buy with a Lease to Purchase, you only pay first | | | | * Minimal maintenance: Large maintenance problems or |
| month's rent and a small option deposit. This will save | | | | any maintenance problems that exceed a certain |
| you between 25% and 85% every time you buy a | | | | amount of money can be delegated to the landlord |
| home. | | | | seller, if pre agreed. |
| * Frequently no down payment at close: Since you | | | | * Privacy: Your name will not be on the title or in the |
| have given the seller an option deposit and you have | | | | public records until you exercise your option to buy or |
| been receiving monthly rent credits, there will frequently | | | | choose to register it on title. |
| be very little or nothing left to pay for a down payment | | | | * Peace of mind: You will have full control of the home |
| at closing. | | | | and can maintain or improve it however you wish. |
| * Profits from appreciation: Since the sales price is | | | | |