Two (2) aspects that are unique to leases with an option to purchase are option fees and lease credits. The option fee is a percentage of the purchase price of the house agreed upon before the lease was signed. It is usually between 1 and 5%, although the owner can try to negotiate any percentage value. The option fee is used to allow the tenant to purchase the property at any time during the rental. Therefore, the option fee gives them the “option” to make a purchase. The rental credit is a portion of the monthly rent, typically between ten (10) and fifteen (15) percent, which serves both to reduce the purchase price of the home and to contribute to a down payment on the home. These fees are almost always non-refundable – if the tenant withdraws and does not purchase the property, the landlord retains all the credit. Rental application – When someone interested in renting a property approaches an individual, the landlord or landlord usually distributes this form to obtain their personal information to conduct a criminal background, credit history and current employment status check. Before you begin, you should know that our lease form must be combined with a rental agreement. A lease form with an option to purchase focuses on the terms of sale and the purchase option, while a lease focuses on the lease details between the seller and the buyer.

Rent to own has many other colorful names: leasing purchase, leasing to own, leasing option, leasing option with purchase option. Just to clear up any confusion, they are usually one and the same. Now let`s take a look at some common and important conditions for renting your own contracts: Option Fee – Also known as option consideration, this is the money that the buyer pays for the right/option to buy the property within a period of time (usually 1-3 years). Usually marked between 1 and 5% of the total purchase price, the buyer loses these costs if he decides not to buy the property. For more information, see Options Considerations below. Rental credit – In addition to option fees, it is generally expected that rent to one`s own buyer will spend more than market rent. To make things fair, a buyer who plays well and decides to buy the property receives a special discount that we call a rental credit. Part of the rent is credited to the payment of the purchase price each month. as long as the buyer adheres to the rules of the contract. (CONS) Mr President, incidental costs/repair costs – Since the responsibility for maintaining the property usually lies with the tenant, renting with an option to purchase can be considerably more expensive than simply renting. 1.

PARTIES: This rental agreement of the property is based on ______________________________________________________________________________Property_ For each month in which the buyer pays his rent on time according to the rental agreement, a rental credit of __ will be applied to the purchase price at closing. This presupposes that the buyer exercises this purchase option in a timely manner, is not in default with the lease agreement and completes the transfer of ownership.4. OPTION TERM: Seller hereby grants buyer the option to purchase the property. The seller agrees not to attempt to sell the property to another party while this lease is in effect. By arrangement, the option starts at _____ AM/PM on _____ and expires at ______ AM/PM on ____.5. NECESSARY TO EXERCISE THE OPTION: In order to exercise this option, buyer must provide Seller with written notice of the exercise of the Option prior to the expiration of this Option. The written notice must indicate a closing date prior to the expiry date of the call and lease option.6. OPTION CONSIDERATION: In exchange for this call option, the buyer will pay the seller a non-refundable fee of ____.

If the buyer exercises this option in a timely manner, these fees will be applied to the purchase price at conclusion, provided that he is not in default with the lease and completes the transfer of ownership. If the buyer does not exercise this option, is in default with the lease or does not complete the transfer of ownership, these costs will be retained by the seller.7. FINANCING: The buyer is solely responsible for obtaining the financing to exercise this option. The Seller makes no representations or warranties regarding the availability of financing for this rental apartment.8. CLOSING AND SETTLEMENT: If Buyer exercises its call option, Seller will transfer the Title within __ days of the date of exercise free of privileges, judgments or other charges. Upon completion, buyer will bear the following costs:______________________________________________________________________________________________________________________________________________________At closing, Seller will bear the following costs:__ by written notice. This is in addition to any other remedies available to Seller under the law or in equity. Option consideration fees and rental credit will not be refunded to the buyer.10.

ADDITIONAL TERMS AND CONDITIONS:____________ Buyer Name: _________________________Buyer Signature: _________________________Date: _______________Seller Name: _________________________Seller Signature: _________________________Date: ___ In the same way that a mechanic must use the right tool for the job, owners must choose the right type of contractual agreement for their situation. Unlike traditional leases, leases with an option to purchase are more complicated because they include two (2) contracts in one, and therefore owners must be 100% sure that the rental method is right for them. .