Why Lease Option
Currently, there are more homes on the market that there are qualified buyers to buy. The real estate markets is both Los Angeles County and Orange County California have lost approximately 8 years of appreciation, this basically means that if you purchased or refinanced your home after 2003 then it’s likely that you do not have enough equity in your property to traditionally sell your home. In addition, due the more strict lending criteria, there are fewer buyers qualifying for loans. This economy has inadvertently created a group of Seller’s who cannot traditionally be able to sell their home and a group of Buyer’s who cannot obtain traditional financing to purchase a home. This has happened before back in the 1980′s and back then, as it is now, the lease option is the solution.
The Win-Win Solution
Brett Matsuura specialize in working with Seller’s and Buyer’s who, for one reason or another, would not normally be able to Sell or Buy in today’s market. A Lease with Option to Buy transaction is where a Buyer will lease a property from a Seller for a short period of time (generally for 6-18 months) and purchases an “option” to buy the property on or before the end of the lease for a predetermined price and terms. The Buyer purchases this “option” from the Seller for an amount equal to 3.5% – 5% of the purchase price of the home and this amount is also credited towards the Buyer’s down payment of there loan. Also, for each payment that is paid on-time, a portion of the rent payment will be credited toward the down payment or closing costs allowing them a way to save additional funds to purchase the property.
Both Seller’s and Buyer’s are required to go through a prequalification process by our team of professionals. For each property we will determine the current value of the property and review the title of the property to confirm that there are no unknown liens or judgement on the property. For each Buyer, they must complete a loan application which will be reviewed by our preferred lender in accordance with today’s FHA standards and will draft a plan of action that will allow the buyer to purchase the property on or before the end of there lease period.
