Need time to improve your credit score? Try renting-to-own a home in Dallas
Buying a home in Houston through a lease-option may be the ideal arrangement for many home buyers who are uncertain about making any long term commitments on a property. It provides an opportunity to lease a home with the goal of purchasing it on a future date. While you are able to hold on to the choice of buying the property on an upcoming date, you are not bound by any major legal obligations. For those who are considering this option, it helps to understand how this type of Houston real estate transaction takes place.
What is a lease option?
As mentioned before, a lease option allows an individual to rent a property with an option to buy it at some time in the future. Although each individual lease agreement may vary, in many cases, you will make monthly payments, on top of your rent to the home seller/landlord, and the extra amount will go towards purchasing the property at a later date. There is usually an upfront payment you will make that will eventually go toward the purchase as well. This helps you retain the choice to buy the home eventually, while freeing you from any legal obligations.
Who should consider a lease option?
A lease option can be a good opportunity for those who may not have a large down payment to make or who may not qualify for a traditional home loan. This type of transaction may allow the individual who is buying the home to benefit simply because they are able to purchase the home even if they cannot come up with the cash on the spot. It gives home buyers a bit more wiggle room. What's more, with lease options, home buyers who are somewhat concerned about their ability to afford the home purchase can avoid risks of foreclosures or any marks against your credit score in the case that you will need to move out suddenly.
Are there risks to purchasing a lease option?
Anytime you are buying a home in Houston there will be a risk of some type of loss. If you do not plan to actually purchase the home, this type of investment will end up being more expensive than just renting a home. In some cases, individuals hope to enter into this agreement now and then purchase the home later, when their credit qualifications increase. Yet, that may not happen. Keep in mind that if you do not purchase the home, you may end up losing any upfront money you have invested in the home.
I'm new to the area. Is this a good idea?
One of the best opportunities to contact an agent about Houston real estate is when you are new to the area and need guidance on when and where to purchase. The use of a rent-to-buy lease like this can help you. It allows you to scope out the real estate market before making an investment to purchase in the area. For those unsure if buying a home in Houston is right for them, this can help you to make that decision.
When does a home seller benefit from this option?
There are numerous times when the home seller can benefit from a lease-option. If the home seller wants some relief from making mortgage payments on the home, this opportunity can work well to provide that. It can also be a good idea for those who have been unable to otherwise sell and want to begin earning something for their ownership in the real estate. In some situations, you may end up selling the home for a higher amount than you could if you were to use a normal transaction. It is also an option for selling when the market is slow.
If you are wondering if buying Houston real estate right now makes sense, contact an agent and discuss your options. For some buying a home in Houston outright is a better option whereas for others, buying through a lease-option could be the best-bet.