Leasing contracts are not for everyone. Since the successful conclusion of the agreement and sale requires financing through a traditional route, individuals whose circumstances do not permit them to obtain a mortgage should abstain from any fixed-account contract. The purpose of the lease agreement is to determine who is responsible for the maintenance and repair of the home and who will pay the costs and services of the owners. You need tenant insurance and the landlord is responsible for purchasing the owner`s insurance. Monthly payment – How much the tenant pays each month. Rental credit – How much monthly payment the tenant will make to the eventual down payment of the property at the end of the tenancy agreement. Tenants are strongly advised to create a trust account to ensure the security of their rental credit. Duration – The duration of the lease. Usually 2 to 3 years or more. Real estate value – The blocked sale price of the property. Tenant buyers and sellers generally agree to maintain the same real estate value despite changes in the home market. Terms and Rules – This section deals with other details of the lease, such as property taxes, home repairs, owner`s association fees, etc. As a lease-to-own is a kind of combination between a rental contract and a real estate purchase contract, there are many details that you need to include. Make sure all the details below are included when developing your contract.
In a clean lease, you pay the seller (as a buyer) a single, usually non-refundable pre-feeding fee, called option, option or option fees. This tax gives you the opportunity to buy the house until a certain time in the future. Option fees are often negotiable because there is no standard rate. Nevertheless, the fee is generally between 1% and 5% of the purchase price. Leasing option sales first became popular financial instruments in the late 1970s and early 1980s, and were primarily used as a means of circumventing disposal clauses in mortgages. But they also have other advantages. Supporters argued that the sale was not a sale because it was a lease agreement, but the courts argued differently. As stated in the tenancy agreement, the option fee and accumulated rental credit are not refundable if the tenant/buyer decides to leave at the end of the tenancy agreement.