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Renter enters into lease option agreement with Seller to purchase property at X amount in 2 years.
Renter pays option to execute the agreement and makes steady payments for 18 months. Renter realizes his option is set to expire in 6 months and wants to sell the property before then as he as a right to sell clause in agreement.
I personally have never been involved in this type of transaction and just curious about feedback from the community.
Lease option or rent to own is rarely talked about, though it is good option for some would be home buyers.Rent to own deals are great for people with not-so-great credit, who can’t qualify for a loan right now – or who can’t qualify for a loan that’s big enough to buy this particular house. But, by knocking thousands of dollars off the purchase price through the rent to own process, you may get it low enough to get a lender to play ball with you.
The option price is just that, an option. Not a reduction in the price of the rent. If you pay extra rent during the time that you are there that is supposed to go towards the price of the house (in the contract) then that could reduce the price. If you don't chose to buy, or can't because your credit is still bad, your option money is gone and the extra you pay in rent is gone.
It's almost always a winner for the owner and a loser for the renter/optionee. Last I read, approx 5% of all lease to own options ever end up in the sale. The other 95% end up in lots of extra money for the landlord.
It is almost always better to save the money paid for the option, save the extra rent paid during the option, and pay all your bills on time so you can buy when the next lease is over.
I can't imagine why any seller would allow a "right to sell" clause in a rent to own sort of situation, but if it is just the option, the buyer probably has the ability to sell the option.
That is to sell the OPTION not the house.
If you can find someone who wants to pick up the option and then exercise it, you can sell him the option, if your contract allows it.
You will not be able to sell the house because you don't own any part of it.
Finding a buyer for an option is probably going to be interesting.
I can't imagine why any seller would allow a "right to sell" clause in a rent to own sort of situation, but if it is just the option, the buyer probably has the ability to sell the option.
That is to sell the OPTION not the house.
If you can find someone who wants to pick up the option and then exercise it, you can sell him the option, if your contract allows it.
You will not be able to sell the house because you don't own any part of it.
Finding a buyer for an option is probably going to be interesting.
^^^This.
You can't convey property that you don't own, but you can convey and assign the option.
Thanks everyone for the feedback as that was what I thought initially. Otherwise, who wouldn't want to partake?
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