Seller’s questions on entering into residential Lease option agreement:?
I need to know if more protective language is usually included in lease option agreements which better cover seller’s interests on the following point: I have read the selling price is determined (typically or always?) at the beginning. If at the end of the lease option agreement the home value has appreciated, is it only the buyer that benefits on the appreciation? Can terms be included that the buyer must purchase the home at the “whichever is higher” price between the stated purchase rate and the current market rate (comps / appraised rate)? Being the seller and wanting to best protect personal financial interests, it seems reasonable to me include this type of protective language.
And, if the home value depreciates and the buyers do not buy, it seems that the seller suffers. This all seems one-sided except for gaining the non refundable (???) option money. However, this may not cover the depreciated value. Does a lease purchase agreement provide better protection?
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July 31st, 2010 at 3:11 am
Virtually any formula for calculating a sale price you can think of can be included either in an option or a lease-purchase if you can find someone else to sign it. But a “future market price” sounds too indefinite to attract a likely buyer.