Have you ever considered a lease option?  Have you been turned down for a traditional mortgage?  Do you know what a lease option is?  I will explain all of the details as well as give you a fantastic opportunity.

Lease options are gaining in popularity especially in Southwest Florida due mostly because of the economic conditions.  Many people have lost their homes to foreclosure or short sales and/or have gone through a bankruptcy negating the possibility of purchasing a home through the traditional methods.  Times were ripe for this type of downturn and good people just got caught up in it and had nowhere to turn.

A lease option is an option to purchase a property at a later date.  The way a lease option works is that an upfront option fee is collected as well as a monthly option premium.  The monthly option premium is over and above the monthly rental amount.  There is a lease option contract that details all the terms and conditions of the lease option.  Make sure you read it carefully and better yet, show it to a lawyer to get their opinion.   Remember, it’s not what the person said but what the contract says.  Usually both the upfront option fee and all or a portion of the monthly option premium are applied towards your down payment when you exercise the option.  Exercising the option is when you actually purchase the home which can be at the end of the option period or anytime within the option period depending on the terms in the contract. 

Oftentimes a set purchase price is determined upfront.  Some lease options determine the purchase price based on the average of two appraisals at the end of the option period.  Still others base the price on a percentage increase in value or other basis detailed in the contract.  It is best to know at the beginning what price you are going to purchase the home for.  During the option period, the home is still owned by the seller and won’t change hands until you actually go through an actual closing with a Title company or an attorney.

Lease options can be very problematic  and usually favor the seller not the buyer.  Investors have spent years preying on people that can’t afford to purchase a home because it is very lucrative for the investor.  The lease optioner takes really good care of the home because they think they are going to own it but when the time comes to exercise the option, the buyers don’t have enough money and lose the house.  The investor  then finds someone else and does the same thing over and over again.

Another problem that lease optioners run into is the receipt of foreclosure papers because the seller has stopped paying the mortgage.   This can be devastating for the potential homebuyer who is forced to vacate the home and start over again losing all of their option money.

Opportunity

I work with a government agency that does lease options on homes that have been foreclosed on.  Our program is very secure and we will only lease option to those that have the ability to exercise the option at the end of the option period.  We have an awesome track record with tremendous success.  Our focus is on the potential buyer and only on the buyer.  The beauty of our program is that at the end of the option period, the entire down payment has already been paid and the closing costs are paid by the seller.  You don’t have to come up with an additional down payment which is where most lease options fail.

We collect a lease option fee upfront at move in time as well as a monthly option premium which is in addition to the monthly rent.  For a one year lease option, both the upfront option fee and the monthly option premium go towards the down payment so that by the end of the option period the total down payment will already have been paid.  Closing costs are paid by the seller which will mean about a $3,000 savings.  The only money you will need at closing is for a one year paid up insurance policy, interest until the end of the month and deposits into the buyers escrow accounts for taxes and insurance.

If you have a credit score of at least 550 with the ability of raising it to 575 at the end of the option period and have adequate reportable income, you could qualify.  Past discharged bankruptcies and foreclosures are okay.  Of course, we look at the past but our real focus is on whether the potential buyer can afford the home and afford the monthly payments.  During the option period, the monthly payment is significantly more than the house payment will be even when you add the taxes and insurance.  If the potential buyer can afford a year of higher monthly payments then it’s a good indication that they can afford the reduced house payment.

Now is the time to get into a home in Cape Coral Florida since our prices are at 2003 levels and well below replacement cost.  In other words, you can’t build a home for what these homes are selling for which is a fantastic sign when looking at value for your money.  We do have inventory now but it is selling fast especially the pool homes.

Call Dan at 239-210-1356 or email d_craddock@yahoo.com or visit my Cape Coral Real Estate websites at www.livingincapecoralnow.com or www.dancraddock.com.