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How do lease options work and what are the benefits?
A lease option is an arrangement with you and a seller to exercise the option to buy a area home after you have rented it for a specific period. A portion of your rent would applied toward the purchase if the option is exercised. This is referred to as rent credit, which most institutional lenders will accept as part of the down payment if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.
If you are a seller, lease options can give you several advantages,
especially in a slow market. These include a monthly rent higher than
market rent, top-market value for the property and tax-free use of the
option consideration until the option expires or is exercised. Also,
the renter is more likely to treat the property like an owner, tax-free
use of option consideration until the option expires or is exercised.
Read any lease-option arrangement carefully for details on transferring the option and other important concerns.
For more information, get a copy of "How Lease- Options Benefit Realty
Buyers, Sellers, Agents and Investors," available for $4 from Tribune
Media Services, 64 E. Concord St., Orlando, FL 32801.
Questions about Real Estate?
Ask us below or Call us Now at 843 849 7587
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Last Updated ( Thursday, 04 September 2008 )
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Contact Information
Jay Rogers The Real Estate Savings Center, LLC 1233 Spoon Court Mt. Pleasant, South Carolina,
Office: 843 849 7587 Cell: 843 367 7587 Fax: 800 889 1847
Lic. #: 24852
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