Real Estate - Lease Purchase Contracts Are Becoming More Common

By Author: Jamie Hanson
Total Articles: 3495
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With Lease Purchase Contracts, the property holder| is permitted to lease or rent his property to the buyer till he closes. A Lease Purchase Agreement is generally used when the prospective buyer is interested to buy the property but is not yet prepared or is competent to close immediately. Thus, with this contract, the buyer can rent the property till he closes.

A Lease Purchase Contract lets the buyer to close somewhere between 12 to 24 months, anyways, the contract also lets the buyer to close it before. It is a negotiable contract where the maximum term period is flexible. This contract is helpful to the property holder as the buyer has to satisfy one condition, that is, he has to make a non-repayable fee of 3% of the purchase price, this is termed as purchase deposit. This amount shall be further credited against the buyer's down payment of the property. This amount is a rational purchase deposit. However, this purchase deposit amount can be discussed amongst the buyer and the property holder. This amount can be significantly greater or lower and this is very common.

Most of the property holders as well ...
... as the buyer's bother about the instability of Purchase price of the property; they are jumbled whether they have to consider the purchase price of present value or the future value. Well, the buyers and property holders both prefer to fix the purchase price before hand. The buyer can close with loan or cash before the timeframe jointly settled by both in the contract and the property holder in fact relys on the buyer for closing. Thus, if the property holder allows to increase the time period of the contract, the Lease Purchase agreement calls for rise in the purchase price.

A Lease Purchase Agreement is advantageous for both, the and the buyer. It is beneficial for the buyer as he gets sufficient time to gather huge cash for the down payment, clear the earlier dues or gets time to sell off some other property. Customers also enjoy "forced savings plan" and this is as a part of monthly rental is generally credited in the purchase price. The amount fixed for monthly rents can be discussed between both the parties of contract as per the rules of agreement. This contract |is beneficial to the as they enjoy the current high market prices of the property because of the flexibility given to the buyer on the closing dates. However, there are chances that the monthly rentals may be higher than the market rents and even the buyer has to tolerate all the costs of preservation and upkeep of the property. This is so because, the buyer is the future owner of the property and it is obvious that the is reassured from paying mortgage on the property that is vacant.

Thus, a Lease Purchase Agreement is very beneficial and secured for both the parties, that is, the buyer and the in the contract. However, each factor related to the property must be investigated properly before both the parties sign the deal.

Know all about Lease Purchase Agreement and how is it beneficial to buyer and the seller. Learn more about Lease Purchase Contract at leasepurchasemadeeasy.com