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This Great House

Lawrenceville, GA 30043
Cell) 678-427-7700
Office) 678-975-7555
Fax) 678-975-7127

Lease Purchase Program

This Great House Realty has a proven track record increasing investor liquidity and helping owners sell their homes with our creative lease-to-own program. This program is based on the traditional lease-purchase or lease-option, a transaction through which a resident leases a home until they are able to buy it. We have a high success rate with this program, closing most of the negotiated transactions. This home selling technique has outstanding benefits for both the buyer and the seller.

The seller is able to open up their home to many more willing buyers, while a buyer is able to take advantage of a homes appreciation. For example in Gwinnett County, homes have been appreciating between 5% and 7% a year for the last 20 years. Although this is only an average and some years have been better than others, this gives buyers the opportunity to enjoy the many benefits of home ownership while building future equity.

What is Lease Purchase?

A lease purchase is a contract between a buyer and seller to sell a property with a delayed closing. The contract forms are the same used in a standard selling situation. All of the issues of a purchase contract are addressed including price, financing, taxes, termite bond, title exam, warranty deed and disclosures. No Detail is Ignored. The closing date, maintenance and possession issues are the only items that are different. The actual closing date is left open depending upon when the buyer is able to secure long-term financing. The contract terms are usually set up to run between 6 months and 2 years. This gives the buyer the necessary time to work through credit issues, which may exist that prevent the buyer from securing an immediate loan. The possession issue is addressed through a lease that is attached as an exhibit to the contract.

How Does A Lease Purchase Benefit The Owner?

  1. Leases are Longer: A regular tenant may leave after 12 months. A Lease Purchase tenant needs 1 to 3 years to clean up his/her credit, save up the down payment or gain the employment tenure necessary to meet lender requirements. Long leases eliminate the expenses that accompany vacancies. If they do not close, you have had a long-term tenant.
  2. Maintenance Expenses are reduced: In a Lease Purchase agreement, the tenant takes responsibility for all maintenance. This can save you plenty of money and grief.
  3. Deposits are Larger: While an ordinary tenant deposits one month's rent as a security deposit, a Lease Purchase tenant typically deposits two to four times that amount. This money is called NON-REFUNDABLE EARNEST MONEY and is disbursed at time of move in. When the tenant closes, his deposit is credited toward the purchase price.
  4. You Receive Full Price: Tenants who buy on a Lease Purchase do not have leverage to negotiate a lower price. They are not shopping hard for value because their options are limited. They usually pay full retail price, or even more.
  5. Closing Costs are Lower: A Lease Purchase tenant is usually responsible for paying future closing costs, saving you the seller several thousands of dollars. There is no immediate closing cost to execute a Lease Purchase contract, which allows the buyer the needed time to save for future closing costs.
  6. Better Care of Property: Generally, tenants will take better care of the property if they anticipate owning it. We still suggest that the buyer regularly drive-by the home to insure proper care of the property.
  7. Sell Without A Vacancy: One big expense of selling a home is the cost of getting it in selling condition and keeping it that way until closing. Mortgage payments, insurance, taxes, utilities, paint, carpet, lawn care and the risks associated with an empty house can cost plenty. These costs are eliminated when a tenant buys using a Lease Purchase. They pay rent right up to the day of closing and there is no vacancy.

How Does A Lease Purchase Benefit The Buyer?

  1. A buyer gets to enjoy all of the many benefits of home ownership today, without waiting for mortgage approval and/or closing.
  2. The buyer realizes equity as typically homes are sold at current (today’s) prices. As the home goes up in value this equity goes to the buyer. For example on a $150,000 home it would not be unusual for the home to increase in value by $10,000 during the contract term. This equity in the home now belongs to the buyer. Keep in mind homes going up in value is never a guarantee but if property is well maintained this is usually the case.
  3. The buyer is able to use the increase in the home’s appraised value to secure a lower mortgage rate.

Frequently Asked Questions

Do Tenants ever fail to maintain the Property?

Yes. Occasionally, even though they agree to fix all problems they let things go and damage to the property increases due to neglect. For this reason it is always recommended to conduct regular property surveys to monitor physical condition.


What about Rent Credit?

Occasionally, Tenants negotiate hard for some of the rent to apply to their down payment. This helps them build the down payment and allows them to close. The only time rent credit affects you is at closing. Like earnest money, it shows up as a credit to the tenant as previously paid money. If they fail to close, they get nothing back. Rent credit is a negotiable item depending upon the need of the buyer.


Who is responsible for insurance and taxes?

The seller must keep a landlord policy in effect during the lease period. This policy covers the house and liability issues. Renter's insurance is a recommended option for the Tenant. Property Taxes also remain the responsibility of the seller until legal title changes over.


What if they are ready to close and I cannot?

If you have a title problem or refuse to close, you have defaulted in the contract. Most tenants are willing to give you a little time to clear up the problem. If you cannot give them what you promised ( good title ), they will get mad, and come after their deposit. They will succeed! Do not contract to sell if you cannot deliver a good title within the term of the contract.


Is it easier to Lease Purchase than sell?

Yes! Offering your home for Lease Purchase exposes it to a larger segment of the market. You will appeal to a larger group of buyers you cannot reach using the "For Sale" approach. You will solve your problem quicker using Lease Purchase.

A Lease Purchase is a contract to sell with a delayed closing date


What are the chances of a Lease Purchase Closing?

Although there is no such thing as a guaranteed closing, This Great House has had great success with closing the Lease Purchases we have structured. We have gone through our learning curves and corrected the mistakes made in earlier deals. Experience is a great teacher. We are careful not to create false hope for either party by making deals that have little hope of closing. We do not hit 100%, but we have closed most. The good news is, if you look at the benefits of the Lease Purchase, there is no downside for the Owner or the Buyer. You win, even if the Tenant fails to close. Typically if a buyer is willing to work on improving their credit they should be able to close within the contract term.

Why should I use This Great House to help with my Lease Purchase?

Because of the number of properties that we market on a regular basis we get many calls a day from people looking for homes just like yours. We have the experience to help both parties put together deals that benefit everyone involved.

Why spend many months working with a traditional Realtor in hopes of finding that one buyer that falls in love with your home and is able to actually close? We have seen so many deals fall apart at the last minute due to a buyer not being able to get the required financing. Selling homes on you own or through a typical Realtor eliminates over 60 % of potential buyers. In today’s difficult market you cannot afford to eliminate this many potential homebuyers.

We do not recommend relying just on us to sell your home. We should only be part of your overall marketing strategy! You have nothing to lose by trying our services and everything to gain!

What happens if the Tenant Fails to Close?

We find that one out of five do not close for one reason or another. Several months before the closing date, you will need to contact the tenant and discuss their intentions. If they need more time, you may be willing to extend the closing date. Again, you are in control of this so you will make these decisions. If they plan to move, there is not much we can do about it. They forfeit their deposit and will still be responsible for leaving the property in good condition. We will begin marketing per your instructions and complete a normal move-out inspection. Often, the property is returned in better condition than when the tenant moved in. Occasionally, the tenant makes improvements that stay behind and actually increase the property's value.

There is no downside to a Lease Purchase.

You win whether they close or not!

Please email KMorice@ThisGreatHouse.com or call This Great House Realty today at 678-427-7700 for more information or to get started with a lease purchase for your home.

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