Patience Is A Virtue
Patience Is A Virtue
No, it's not me (although some might argue)! Actually, I'd like to talk about the lease-option, lease-purchase, lease-to-own, rent-to-own, whatever name you might want to call it by.
I'd define the lease-purchase as a contract to purchase a home which doesn't close for an extended period of time. Most often, the lease-purchase contract is designed to close a year or so in the future....after the purchaser has a chance to clear up a few credit blemishes and get qualified for a respectable interest rate on a mortgage. In the interim, the purchaser makes lease payments to the seller. A portion of the monthly payments is credited back to the purchaser at the time of closing, whenever it occurs.
Sounds like a great idea, right?
Here's why I don't recommend a lease-purchase to buyer clients: You do not have access to the full inventory of available homes and neighborhoods. (Bear in mind that my experience is in relation to the residential real estate market in and around Charlotte NC, things might be different where you live.)
The houses that are available for lease-purchase tend to be the challenged ones that could not find a straight purchase. The sellers are grasping at straws to stem the hemorrhage of the monthly payment, so they figure something is better than nothing. Do you REALLY want to buy the house that no one else wants? Do you really want to be in a neighborhood that doesn't support a resale home? Sure, you might be locking up a great deal for the future, but how do you know, since you can't shop everything in your price point?
The rest of the lease-purchase deals being offered are by investors, who know that chances are good that the purchaser will never complete their credit counseling and will leave behind a fat deposit (expect 3-5% of the purchase price, non-refundable, when you do a lease-purchase). It's a cash cow.
Wouldn't you rather buy THE house instead of A house? You know, I'll be here with you throughout the next year as you work with a lender to correct your credit and we'll have a fabulous time shopping for the right house when the time is right.
Patience is definitely a virtue-and it's a hard one to nurture, I'm the world's most impatient person myself. But be smart and diligent and this year will fly by..and before you know it, we'll be out house-shopping for something you can purchase and OWN in 30 days instead of a year.
