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Buying a House through Lease Options

In a slow market, with more homes for sale than buyers, the opportunities to creatively buy a home explode. Sellers who must move because of job relocation, to build a new home, or for whatever other reason are often faced with the prospect of double payments. They are desperate and open to ideas that can stop or reduce their financial hemorrhaging.

These situations are tailor made for lease options, which allow buyers to lease a home with the option to buy it sometime down the road. This can be a win-win situation for both buyers and sellers.

For buyers with less than perfect credit, or who are new on the job, lease options make it possible to live in a home now, with the possibility of owning it in the future. Thus, sellers create a cash flow to make mortgage payments to stop or minimize a negative cash flow.

Typically, a seller leases a house to the potential buyer for a certain period of time—say, a year. At the end of the year, the buyer gets a mortgage and closes on the home. The buyer and seller can lock in the selling price at the beginning of the lease period or they can determine it at the end with a certified appraisal.

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