Many buyers want to avoid a permanent living arrangement where they realize they’re unhappy, and lease options are a solution for these buyers. During the contract period, you have a chance to try out the home and ensure that you want to stay in residence for the long term, following through with purchasing the property. For other buyers, lease options allow them the time to save for a downpayment and get their creditworthiness in order while enjoying the perks of homeownership.
A lease option gives you the right to buy a property, but not the obligation, given you live up to your end of the agreement. In addition, the owner agrees that they won’t sell the property to any other interested party during the contract term and won’t pursue you legally if you decide not to buy at the end of the agreement.
It’s best to go into such a significant financial transaction with your eyes wide open to the agreement’s limitations. Typically between one to a three-year legal contract, it’s best to enter into the arrangement with realistic expectations about how lease options work. So read on to explore our buyer’s guide to navigating the world of lease option properties in Michigan.
Owners can only estimate the property’s future market value when determining the sales price
of lease option properties in Michigan, with the price stated in the agreement. As a result, the buyers agree to a purchase price above the current market value because the owner is taking a risk they’ll be selling at below market value at the end of the agreement.
Owners typically charge a premium and a higher than average monthly rent for their lease option properties in Michigan. The premium is typically applied as a credit towards the downpayment at the end of the agreement. Working with a lender will help you understand if the credit will be acceptable under their mortgage loan terms.
Often buyers must seek potential lease option properties in Michigan and reach out to the owners, creating the opportunity. When searching for potential lease option properties, you will want to look for homes lingering on the market. These sellers may be more motivated and, with the right approach, open to other methods to relieve themselves of the responsibilities and costs associated with holding the property.
Naturally, owners that sell lease option properties in Michigan will have to run a background and credit check as they would with any tenant. In this case, however, as the buyer, you will want to ensure that the seller isn’t about to lose the property, so you will need to research the title, have an inspection and appraisal, and screen the seller, asking for a credit check and their tax records.
At Providence Homebuyers, we can help you over any hurdles standing in your way, whether you are getting your financial ducks in a row or just want to ensure you are happy for the long term with the home you purchase. The professional home buyers at Providence Homebuyers can help you locate the perfect opportunity without charging you the high commissions of a real estate agent. The professional home buyers at Providence Homebuyers will save you money and time; we make the process easy and guide you step by step. And don’t forget to ask about our current inventory of the best lease option properties available in Michigan.
If you are a buyer ready for homeownership, let the professional home buyers at Providence Homebuyers help you maneuver the realm of lease option properties in Michigan. Call Providence Homebuyers at 3132171075.