Friday, September 4, 2009

Real Estate - Who Needs a Lease Purchase Agreement?

It is the dream of almost every human being to own a house for himself. Often, it is not possible for various reasons. The reasons could be different for different set of people. Some of them maybe facing critical financial issues, while others may have not got their loan sanctioned. Whatever the reasons are, it is really disheartening to see the dream house being sold to someone else right?

What can you do to reserve the house now and buy it later when you have gathered enough money? Here comes an easier and much better option. You can always go for a lease purchase agreement. This particular agreement draws the owner tenant relationship. You can also stay in the house for the agreed amount of time by just paying some initial deposit. Once this deposit is paid and the lease purchase agreement is signed between the owner and the tenant, the owner loses his right to sell the property till the agreed upon duration.

Also, you can ensure that your dream house is safe with you and you can purchase it in due course. You may ask if entering into this lease option will oblige you to buy the house in any case. The answer is no. You don't have to buy the house at all after the period expires. Though the fact is that you stand all the chances of buying the house for yourself, you can decide if you really want it or not.

The other issue that is sure to hit your mind is this, how much should you pay as an initial deposit? Typically, the amount that you have to pay is somewhere around 3% of the cost of the house. Some of the owners can increase the same or decrease it too according to their wish. In addition to this deposit, the owner may ask for one month's rent as advance. After all these are sorted out, you need to sign an agreement which is nothing but the lease purchase agreement.

No matter which scheme you opt for, be it lease option or lease purchase agreement, you need to bear the monthly rental for the house. A good lease purchase agreement will consist of the mention of exact amount of rent that has to be paid too. A part of the rent you pay is accounted for the purchase price of the house in which case you will end up paying lesser money at the end of the agreed upon lease period.

If you think you need an extension of the lease period, then you can do so only with the permission or agreement of the owner. If he does not agree, then the deal ends then and there.

Michelle is a professional writer who is experienced in writing articles for web and ebooks.
If you are planning to go for Lease Purchase Agreement, then you should plan and make your decision wisely; As a small mistake can actually cost you thousands of dollars. For more information, please visit:

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