Zillow Advice: Selling Process - I would like some advice on Lease/Purchase when selling a home. Pros? Cons? http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ Zillow Advice | Zillow Real Estate "We do have both homes mortaged."&nbsp; ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ <strong>"We do have both homes mortaged."</strong>&nbsp; If you decide to pursue option, check with your lender, your mortgage notes may become due and payable immediately upon the execution of the contract.&nbsp; Typically this is only an option for sellers without mortgages. Thu, 20 Sep 2012 19:58:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T19:58:00Z Lease with option is undergoing ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ Lease with option is undergoing a renaissance, since there are a lot of buyers who had a short sale or foreclosure and cannot purchase for a few years.&nbsp; When the buyers hear how it works, most of them will tell you they do not have the downpayment, it should be a minimum of 10% non-refundable.&nbsp; Then on the monthly rental you will add&nbsp;a surcharge to apply toward closing.&nbsp; The lease should have a beginning and a definete end, at which point the buyers close on the property.&nbsp; Few of these leases come to closing, so the buyer looses his deposit.&nbsp; You will need a good real estate attorney to write you the lease to purchase option.&nbsp; The downfall for you is that you will be dependent on that closing to do what you want to do.&nbsp; Conversely, if you have "a ton of equity" on the properties, why don't you reduce the price and see if you can sell them instead of lease with option.&nbsp; Note, I would have the buyers go through a lender that you know to have them pre-approved, that way you will know when will they be able to purchase again.&nbsp;Good luck! Thu, 20 Sep 2012 12:50:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T12:50:00Z If your goal is to buy a ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ If your goal is to buy a house with cash I wouldn't even consider this option.&nbsp; You will be moving away from your housing goal only to fallow a more risky route.&nbsp; A lease with option to buy adds risk to both sides of the table..&nbsp; The buyer also has elevated rick in the transaction. <em>[link deleted by Zillow&nbsp; moderator. Please see our Good Neighbor Policy for posting guidelines]</em> Thu, 20 Sep 2012 01:28:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T01:28:00Z The structure is generally ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ The structure is generally that the leasee gives you the normal market value rent and you also collect an additional amount to be applied to the purchase at a future date.&nbsp; The value of your home today may change, so the contract may not make sense to one or either party when the lease period is up.&nbsp; They are very tricky and as mentioned before, an attorney can advise you as to how you want to structure the lease/option.&nbsp; Sounds like a normal sale is the way to go.<br/>Good luck to you,<br/>Suzanne Looker Thu, 20 Sep 2012 01:26:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T01:26:00Z You will typically get a ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ You will typically get a lot of people that want to do a lease/purchase usually because they cannot qualify for a mortgage for various reasons of which the most common is bad credit.&nbsp; It is obviously more risky to go this route.&nbsp; If you feel compelled to do a lease purchase I would recommend getting a substantial down payment to protect your interest and make the buyers have a stake in the transaction that they would not want to walk away from.&nbsp; Best of luck. Thu, 20 Sep 2012 01:21:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T01:21:00Z Lease purchase tends to be ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ Lease purchase tends to be a situation where people who can't currently qualify for home purchase (for many reasons) try to buy a home.&nbsp;&nbsp; <br/><br/>Some of the downsides:<br/><br/>You are basically a landlord until they get financing.&nbsp;&nbsp; You will not be able to tap into your equity, and you will have to deal with all the hassles and joys of being a landlord.<br/><br/>Chances are very good that the renters will not close the deal.&nbsp;&nbsp; The percentage that actually close are very low.<br/><br/>As you wish to tap into the equity to be able to purchase a new-to-you home, this does not sound like a very sensible solution for your current situation.&nbsp;&nbsp; When a house doesn't sell, look seriously at pricing.&nbsp; <br/><br/>If you go against my humble opinion, get an attorney involved in the contract.&nbsp; Ask for a substantial (say 10%) non-refundable down payment and charge fair market rent (for you) plus say $100 to $200 extra that goes towards the purchase price (also non-refundable).&nbsp; Establish a purchase price today, and a deadline for them to obtain conventional financing (two years max).<br/><br/><br/><br/><br/> Thu, 20 Sep 2012 00:49:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-20T00:49:00Z Thank you Allison! http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ Thank you Allison! Wed, 19 Sep 2012 23:39:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-19T23:39:00Z I would recommend speaking ... http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ I would recommend speaking to a lawyer. They are going to be the most familiar with the contracts you would need.<br/><br/>Other than that, unless either of these potential renter/buyers has a large sum of money to give to you upfront - you would not be accomplishing your goal of purchasing a different home in cash.<br/><br/>Good luck! Wed, 19 Sep 2012 23:33:00 GMT http://www.zillow.com/advice-thread/I-would-like-some-advice-on-Lease-Purchase-when-selling-a-home-Pros-Cons/460633/ 2012-09-19T23:33:00Z