Now, if you’re anything like me, you understand things much quicker and easier when it’s in a picture. So we put our heads together and came up with this explanation of lease options…
We would like to do a follow up to this where we answer the FAQ’s. So please go ahead and ask us any questions you now have about selling your property on a lease option.
Lease options used to be very common place. In fact prior to land registration coming onto the statute book in the early 70′s they were protected by a charge on the land charges registry.
However, as the markets improved and it got easier to secure a mortgage this form of buying property fell out of favor. Recently lease options have become fashionable again as it gives people a chance to secure a property during difficult times.
Lease options are perfectly legal if done correctly and between a willing seller and a willing buyer where both parties have independent legal advice.
Why lease options are perfect for this market.
In essence, with a lease option you lease (rent) your property to a potential buyer who has the option to buy the property at the end of the lease period.
Even at below current market value, many homeowners are struggling to sell their properties because potential buyers simply can’t get mortgages. This creates a desperate and stressful situation for sellers that need to move out of their property either because they have to relocate for work, or they need to upsize to accommodate a growing family, or perhaps they’re splitting up.
Often the only option left is to rent their property out, turning them into reluctant landlords. Unfortunately being a landlord can be a minefield in itself and having the pressures of voids, tenants not paying, maintenance costs or sometimes severe damage to the property can become unbearable.
Lease options are a great way of addressing most of these problems. Firstly you’re not limited to only selling to people that can get a mortgage, but can consider anyone that would qualify for a mortgage given some time. This means that you’re far more likely to get a better price for your property and not losing money on it. Secondly, the tenants moving into your property are responsible for the maintenance of the property and often treat it as their own, as someday it will be.
There are also other benefits for the seller:
- You’re delaying the payment of fees related to selling a property.
- You have no agent’s fees.
- Your moving date is fixed, so you can make your plans and move on with your life.
- The legal process of a lease option is simple and quick and can usually be completed within about 4 weeks.
- You don’t have the stress and disappointments associated with being in a chain.
Of course lease options should always be between a willing seller and a willing buyer and be drawn up by an experienced solicitor.
Would you consider selling this way? If yes, why? If no, why not? Would be great to hear your thoughts…