Lease Purchases In Atlanta And Many Other Cities May Not Be The Best Option For Buyers In This Real Estate Market

Although many home buyers are attracted to lease purchases for whatever reason, one of which is the American dream of owning a home, buying a home under a lease purchase may be dangerous to their credit and finances. And although most buyers who enter into lease purchase already have credit issues, renting a home towards a lease purchase will do nothing to improve their credit unless they are working with a company that reports their monthly rent. There are many dangers in buying a home as a lease purchase that buyers need to consider when they are using a lease purchase as a method of home purchase in the future. Although most buyers can not tell you why they want to lease purchase, the few who have defined the option say that they want to feel like they are making headway in achieving their dreams. However, in further conversation, they are shocked when these pitfalls are discussed:

1. Buying a home under lease purchase means that you are losing your negotiation power in lowering the sales price in the same way that you could if you were purchasing now.

2. Applying part of your rental payment to your eventual down payment is only putting that money in someone else’s bank account instead allowing yourself to get interest on the money.

3. When a lease purchase option for sale is used, most sellers require non-refundable money that will not be refundable in the event of a non-purchase.

4. The issues of inspection and appraisal can not be foreseen and must be stipulated specifically to avoid losing the non-refundable money.

5. Often times you have to do the inspection for the property right as you move in so you will have to spend $400.00 or more for a house that you may not qualify or want when you time to buy arrives.

6. And the most dangerous situation in today’s market is the fact that many sellers are choosing foreclosure and walking away from homes that are not their primary residence, which means that the non-refundable money, overage in rental payments and rent payments are gone when the bank evicts the occupant in a day’s notice costing the renter/buyer even more money in unexpected moving expense.

If you must lease purchase a home, here are some ideas to avoid the disasters listed above:

1. Don’t apply any money from your rental payment to a down payment through the seller. Put it in your own account. So, this means that you should negotiate accordingly.

2. Minimize the amount of money that you apply towards the purchase and do your best to negotiate that you will get the money back if you don’t buy. Of course the seller will be holding this money they whole time so you may have to sue them to get your money back. Attempt to get a third party to hold the money like a closing attorney or set up an escrow account at a bank that requires both parties signature to withdraw.

3. Make sure that you put financing, appraisal and inspection contingencies in the contract.

4. Attempt to make the mortgage payment for the seller and send them the difference with your copy and proof of your check. If you can wait to purchase when you are a qualified buyer, you may find that there is better inventory and you have a lot more negotiation power.

Buying a home is a great reward in America and is a worthy goal to strive for when put in the right order of how things should happen.