Buying With Lease Options

When purchasing property via "For Sale By Owner" (in other words, no real estate agents), always buy the property on a Land contract or a Contract for Deed.

Both of these contracts are used when selling property between two parties without a real estate agent. Sit down with a real estate attorney and have him go over the details with you for a land contract.

If the seller offers a lease option to you, turn the offer down. Here's why: A lease is another word for renting their property, which means you don't own it.

If you are simply a renter of the property, the seller only needs to get a court order of eviction and your out of the property. If, on the other hand, you are the owner of the property, the seller will most certainly have to induce what is called a judicial foreclosure.

The difference is probably $10,000 dollars or more in attorney fees, court fees and between 8 and 12 months time for processing. A judicial foreclosure is very costly and time consuming for the seller, and would probably force him to negotiate more favorably towards you.

All the while, the property is in a period of Stay, of course you are still required to pay the seller and follow through with your end of the contract. However, nothing can be put into action until after the foreclosure is completed. This is a very important point to remember.

Know that this has happened, and the people ended up staying in the home mortgage free! They didn't fulfill their end of the contract by paying the seller their monthly mortgage payment like they should have, yet the seller couldn't do anything until the pending foreclosure had been resolved.

Not even getting the buyer to pay their monthly mortgage payment to them! These are the extreme's, but it would be in your best interest to see that you are considered an owner, rather than a renter.


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