Lease Purchase Tips

With lending guidelines tightening and more and more Americans struggling to make ends meet the lease with an option to purchase as grown in popularity. Both from a seller's/builders standpoint; trying to unload inventory and the lessee's standpoint trying to find a nice place for his/her family without the down falls of renting. The growing e-mails and questions I receive regarding this method has prompted me to lend (pun intended) some insight on the subject and perhaps give my audience a couple of pointers.

1) Have an attorney draw up the lease with an option agreement or have a real estate attorney review it. This will help both sides set-up the agreement from the very beginning and will also diminish confusion in the end. Not to mention it protects both the lessor and lessee.

2) Have the lease agreement recorded at the county courthouse. This is probably one you have not heard of but believe me it truly helps when you want to actually purchase the home as it solidifies your position with the lender.

3) Make sure you pay by check and once the check you have written clears the bank get a copy (front & back) of the cleared check. Do this for 12 consecutive months or more and again this solidifies our position with the lender.

4) If the lessor will allow I would suggest getting you added to title along with the current owner's. Again this will help with the lending angle when it does become time to purchase and close on the transaction.

5) Make sure you keep a log of any and all improvements that you do between the time the lease is executed and the closing of the transaction. Keeping receipts and verification for these items will definitely help with additional value and will solidify your equity position with the property.

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