Local Real Estate Comments and Ramblings


How about a lease purchase for a seller?

Lease purchase for sellers?

A few years ago I did a post on lease purchase for buyers.  

How about a lease purchase?

I will tell you the gist of it is that in most cases I am opposed to a buyer doing a lease purchase.  But what about for home owner sellers?  Should you consider putting your home up for lease purchase.  The case for a seller to do a lease purchase is much better but with one huge caveat.......

Many of them do not end up selling!

Be aware that there is a good likelihood that if you do a lease purchase it does not mean the home will sell.  It could sell and if it is properly structured the chances are better that it will end up in a sale, but there is no guarantee.

So even if it might not end up in a sale a few years down the road why do it?
  • If your home is not selling and you are considering renting it as an alternative then consider adding a lease purchase to the equation.
  • If you are an investor and want higher rent and more upfront cash then consider it.
  • You can get longer lease terms.  24-36 months would be common.
  • Less maintenance.  Lease purchase occupants are more likely to treat it like they own it.
  • More cash flow from higher rent
  • More money upfront in the form of  Earnest money or other consideration. I recommend the earnest money be non refundable.
  • Lower seller paid closing costs.  We don't know what kind of loan the buyer will get 3 years from now. Besides, getting a no closing cost loan is the "biggest no brainer in the history of earth" right?'
  • Higher sales price.  Your tenant/buyer is not in a position to negotiate.

If it is all structured properly and the correct expectations are set for both the tenant/buyer and the seller/landlord it can be a good experience that ends in a sale!

  • Set the price realistically.  Remember that the buyer will get an appraisal and if the price is too high it wont close.
  • Remember that it it is lease until it actually sells.  Abide by landlord tenant law, collect late fees, etc. 
  • Don't go crazy with the rent credit.  Most lenders won't allow too much credit at the time of the mortgage.  However, if the lender balks you can credit some toward purchase and then some toward closing costs.
  • Date of closing, possession, inspection, and many other contract points are all negotiable.  It's much easier for a seller to set the terms!




Bob Southard
Broker - Owner  Atlas Realty Service LLC #75911
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CALL ME DIRECT: 770-656-9134

Buy a home, Sell a home, in Powder Springs, Marietta, Kennesaw, Acworth, Smyrna, Dallas, Hiram,and Cobb, Paulding, Douglas, North Fulton, South Cherokee, County, Ga. Call me for all of your real estate needs.

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Comment balloon 5 commentsBob Southard • January 24 2012 10:41AM


In the current market, buyers most be aware of lease purchase, as the seller can be foreclosed on.

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) over 8 years ago

Bob - we did a lease-option as buyers a few years ago on a big home in a nice part of town - and found out how much was seriously wrong with the home!  We RAN away from that option ASAP!

Posted by Sharon Lord, New Home Advisor (Maracay Homes) over 8 years ago

Appreciate the info on lease purchases for sellers.

Posted by go to RealEstateFaster.com & get 20 Listing Appointments per month (Real Estate Faster) over 8 years ago

Spell out all terms, when doing one of these I have an attorney draft the agreement from scratch for each client. Even then most do not end up closing.

Posted by Doug Rogers, Your Alexandria Louisiana Agent (Bayou Properties) over 8 years ago

Bob - I've never represented a client on either side of lease-option --- it really does not seem to come up other than in casual conversation.   

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 over 8 years ago

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