Friday I had a real estate deal close that has been in the works for a year and a half. It was a lease option, and unlike most lease options actually went through.
A year and a half ago I had a home in Logan listed for sale. We got the property under contract and everything looked good to go; the appraisal came in above value and the home inspection was completed. Then, a few days before closing, the pre-approved borrowers received word that they couldn’t get financing.
At this point my seller had already moved and the home was vacant. Rather than put the home back on the market, he elected to allow the potential buyers to sign a lease option” agreement.
A lease option agreement is essentially a rental agreement, where the renters put down additional consideration that will give them the option of buying the home by a future date. If they do exercise the option, then that additional money will be credited towards the purchase of the house.
Buyers typically look for lease option homes because they can’t qualify for traditional financing at that time, but hope to be able to qualify at a future date.
Lease options are beneficial to sellers because it gives them an opportunity to collect rental income to make their mortgage payment during slow markets. It makes their home more marketable, by opening it up to more potential lookers. Because there are so few lease option homes available, sellers can typically get substantially more money from their homes than a straight out purchase agreement.
There are currently just 15 out of 747 homes for sale in Cache County that offer lease options. That is just 3% of all Cache Valley homes for sale.
Click this link if you would like to view the current MLS lease option homes in Cache County.