If you want to sell or buy a home but aren’t ready for a traditional transaction, then you can consider the lease option.  This will allow you to rent out your home to a potential buyer for a specific period of time.  After this time frame, the option to buy will be available to the buyer.  Understanding the conditions that are a part of this can provide you with a different way to sell your home while providing both the buyer and the seller with alternatives that are more flexible. 

The contract that is built with a lease option begins with conditions that apply to the buyer.  The duration of the lease is usually built around a 1 – 2 year agreement, dependent on what the buyer needs.  During this time, the buyer will pay a monthly fee, usually which will go into the down payment of the purchase of the home.  At the end of the lease, the buyer will be given the option to own the home at which point they will move into a mortgage.  If they decide not to buy, then they will move out and you can lease the home to a different individual or family. 

The lease option that is used not only provides this basic contractual agreement but also offers flexibility with the purchase that is made.  When you begin to move into the contract as a seller, you will have the option of controlling the different applications of the lease.  This includes the monthly payments that are made for the contract, duration of the lease and the end expectations for the purchase of the home.  Each of these will allow you to move into the correct mortgage so that you are able to have the right settlement for your home. 

Not only is the lease option able to provide you with the correct options as the seller but also allows buyers to have extra alternatives.  Usually, a buyer will get into a lease because they don’t have the ability to get a mortgage.  If they are first time buyers, don’t have a high credit rating or need financial flexibility then this option works better.  Many buyers will also use this if they are uncertain of whether they want to move into a certain home or neighborhood.  The lease works to provide some flexibility and room so the potential buyers can examine their options more closely while having financial flexibility.