With the option of the purchase route, the buyer pays the seller money for the exclusive right to acquire the property within a certain period of time (often from six months to a year). Buyers and sellers may agree on a purchase price on that date, or the buyer may agree to pay the market value at the time of exercising its option. It`s negotiable, but many buyers want to insure the future purchase price at first. As we have just seen, to find a property owner who would be interested in a rental option, look for someone with negative equity who has to move because: it is not easy: the needle-to-hay ratio is not in your favor. Once you find it, a leasing option will be a whole new concept that you`ll need to explain. And they won`t fall in love with the idea because it`s not their dream solution (even if it`s the only option they have). So is a leasing option a brilliant option for the property owner? No, you`d rather get rid of yourself now, or at least have the certainty of selling later. But if it`s the best option they have, they might choose. From our point of view, leasing options sound pretty good: everything is positive, because there are two ways to take advantage of this option, and we can simply make the property without consequences if things do not work. To have a valid option, the buyer tenant must, in most cases, provide a „valuable consideration“ (royalty) for the option. In general, sellers will ask as much as possible – often about 3-5% of the purchase price. The buyer tenant will usually want to provide as little as possible – even a symbolic amount of $100 represents „consideration“. The option gives the tenant the right (but not the obligation) to acquire the property at a later date.
The rental option only binds the seller to the sale, it does not bind the buyer to the purchase. This makes it a „unilateral“ or unilateral agreement. On the other hand, the purchase of leasing is a bilateral or reciprocal agreement. Leasing purchase is another variant of the same topic, with some minor differences. The buyer (tenant) pays the seller (owner of the property) the option money for the right to buy the property later, and he accepts a purchase price – often at or a little more than the current market value. During the term of the option, the buyer agrees to rent the property by the seller for a predetermined rental amount. For the contract to be legally binding, there must be at least one down payment, but this can only be £1. So what if you`ve seen people talk about „buying a house for £1“? These are leasing options that they are talking about. An evaluation case should be included in the leasing option agreement. . . .