Need Suggestions
I have had a property I bought on a foreclosure for one year. I rehabbed it and now have had it advertised for sale for no less than 4 months and even have advertised it for 2 months as a owner finace, rent to own, lease option and have had no bites. What am I doing wrong? I'm getting desperate!
The key issue is usually whether the price is reasonable compared to others in the area.
Something else you might consider, if you are truly desperate is to offer to pay closing costs and down payment for the buyer.
Advertise in the Properties to RENT section of your local newspaper/cheap paper/Pennysaver...
"Why pay rent? You can own your own home for $1000 down. Call xxx-xxx-xxxx etc"
Hope that helps.
The Option has to identify the property. It should also make itself contingent upon the Lease (breaching of any of the covenants of the Lease renders it null and void). Providing the Lease is fair and doesn't break Landlord/Tenant law, there should be no problem. If you are in court evicting for nonpayment of rent, the Option is without legal force and effect.
[addsig]
I've read that if you give credit from the montly payments to the down payment amount rather than the actual purchase price, that some states consider that equitable interest that must be foreclosed on.
So far I have always used land contracts because the law is clear in Iowa that I must simply give a 30 day notice to cure and then I can file a forfieture of land contract and have the sheriff move them out, if need be.
GOOD LUCK
I have some forms that fit what you are talking about. As I paid for them and they have copyrights I do not want to share them.
I would expect you can pretty easily firm option agreements. They are used every day without a lease as people use options for a lot more then L/O deals.
In some stated the LC is just as effective as a L/O if you really expect to sell. In OR the LC pretty much works like a rental agreement if the person has limited equity into the deal and they have not been there a long time (this aspect escapes me but I think it is multiple years).
If you wanted you could also sell using a standard mortgage/trust deed and go the foreclosure route. This would be fine in states that do not have clear LC processes. The foreclosure process would be no longer then the L/C where the tenant fights.
As to rent credits and other things... The rent needs to be a market rent before a lender will allow a credit of any amount above that (not all but some lenders). Hence the lease can be for the market rent.
The option agreement can have the initial consideration and subsequent payments (monthly even). Not sure is this somehow changes anything other then the total paid in consideration. Assuming there is no unexpected aspects then the option is completely clear, you get the extra cash flow and the lease is a standard lease.
I would make one of the option aspects that the lease is maintained in good standing and that the option dies with the lease. This way they can not elect to move out without the option ending. In OR a lease can be broken by the tenant with 30 days notice (no cause required) but the option would not stop if you did not tie it into the end of the lease.
If this all seems unclear then maybe you really need a lawyer to draft something that meets you needs and at the same time will work in your state.
John
[addsig]
Thanks for the info. I am still looking for the proper Purchase Option.