Are you thinking about selling your Danbury house? Consider a lease option to get the price you want! Learn more in our latest post!
Lease options can be a better solution for selling your home in Danbury in certain situations. It can help you get the best price for your house, while providing you with some extra income until the house has officially sold. Below we answer some of the most important questions we see regularly on how to use lease options to sell your house in Danbury and surrounding areas.
What Is A Lease Option?
A lease option allows the potential buyer to lease the property for a specific term, with the option to buy at the end. Typically the lease can last 1-3 years and if they are not able to purchase it for whatever reason at that point, the property will then remain in your name and everyone can move on. If the lease expires you can also renew it as well. During the lease term, the tenant will pay you a “rent” that is often times higher than the average rate. There are agreements that are arranged so part of the rent can go toward the down payment if they opt to buy. However, whether they choose to buy or not, the amount you have collected during the rental term is yours to keep. So either way, you will come out ahead.
How To Set It Up
It’s critical that you setup the proper terms from the very beginning. You’ll want to make sure both parties both have a clear and concise understanding of their responsibilities and the timeframe and terms in which the agreement covers. In many cases, you’ll set up a rental agreement thats no different than any other residential rental ,but with an option to buy at the end. There are a few key differences with a rent to own agreement as compared to a standard lease. First off, the tenant will usually be the person(s) responsible for all the repairs to the property. This will equate to even more cash in your pocket during the term length of the lease. You’ll also need to know how the funds will be allocated. While the rental payments are typically larger than the average rent each month, you’ll need to decide where that money goes. Will you set aside an amount that goes toward the tenant’s future downpayment? Or are the rental payments going to become all profit for you? Depending on the tenant there will be an agreement that also may require some type of down payment or a deposit that ensures good faith by the tenant.
A Whole New Market Of Buyers
Using a lease option will definitely open your home to more options and selling to buyers. There is and average of 81% percent of people out there who are ready to buy but aren’t quite able to get the financing they need. A lot of them are great people, who at one point in their life hit a hard spot and now may have something negative on their credit report from years ago. They could have even been hit with an unexpected debt that’s keeping them from getting a loan. With leasing your property and giving them the option to buy, they will be able to get their credit and finances in order, buying your property outright when the time comes. This gives you so many opportunities to sell at asking price on the lease contract where the price is set, opening the door to whole new realm of buyers.
What’s The Risk?
Well to be honest there really isn’t one. When you look at the risk think about the worst case scenario, they don’t buy end up buying your Danbury house at the end of the lease. You will have made some good money, and the property will still be yours. NO worries about repairs and maintenance. You can still renew a new contract if you and the tenant agree on new terms. You can sell it on the market if the market gets better at that time. You can even rent it out the traditional way, or you can take on another prospective rent to own tenant. No matter what, you will still come out ahead.