Lease Option agreements can appeal to sellers in a number of ways. The seller has the knowledge that all the costs associated with their present house are taken care of and that they are free to more on with their lives.
Selling a Lease Option is a way for a householder to 'move on' with their life. If their house is not selling because the market is not right just now or they are stuck with a mortgage that is locked down for a number of years, a Lease Option could be one way move on. The seller hands the buyer the right to purchase that property at a specified price and at a specified time, during this time the seller has no more involvement in that property. At the specified time the transaction is concluded with the seller realising the price for the property as laid out in the agreement.
There are a number of reasons why a house owner may wish to opt for a Lease Option, amongst these are that they need to get into a more manageable property, or that they wish to relocate to be nearer family or friends. The property might be owned by someone who has 'inherited' a property, possibly reluctantly, or for whatever reason, they wish not to be bothered with this property anymore.
Unreliable tenants who don't care for a property are a landlord's worst nightmare. Think wine-stained carpets, blocked sinks and car tyres in the garden. Those on longer leases in properties they're looking to own are unlikely to fall into this category. Longer rental periods also allow landlords to avoid costly gaps between tenancies when a property lies empty.
The Lease Option offers some protection against the value of a property going down. However, the seller has the inverse risk to the buyer. If house prices rocket during the rental period then a property could end up being sold for much less than it could make on the open market. However, they will know that they have been protected over the months from falling prices, often a good price to pay for such peace of mind.
Like any contract, the exact terms of a Lease Option will vary. These range from the number of months over which the Option runs to the exact agreement terms. But it is normal to find that an Option agreement is right for all parties when all parties are on a winning strategy.
The contract normally gives the buyer the right to buy earlier than the final Option date Equally, if the tenant's situation changes any time after the first six months of renting, they can give one month's notice and forfeit their option to buy. With the landlord's agreement, they can also pass on their tenancy and Option to another tenant.
As with any property purchase, a Lease Option carries some risk for buyers and sellers alike, but with beneifts on both sides of the deal, this new form of tenancy could prove a refreshing alternative to traditional property agreements in the UK. A true Win - Win situation.