Lease to Own a Home in FishHawk Ranch
I am sure some of you reading this are not familiar with the term least to own a home in FishHawk Ranch or sometimes called lease purchase. Very simply it is renting a home with the option to purchase it in the future. For most home buyers this is not an option that they really need or want but for some buyers, it is very helpful and can be a huge step toward homeownership.
Being a Realtor in FishHawk Ranch and the Tampa Bay area is different from most of the rest of the country. A good majority of my buyers are moving to the area from other states. This creates some very unique challenges that are not found when buyers are moving locally. Even though most of my out-of-state buyers do purchase a home when they first move to the FishHawk Ranch area, I do still have a handful of clients every year that do end up renting for a year before they purchase a home.
Reasons Why a Buyer May Want to Rent Prior to Buying a Home
- first-time homebuyer’s who are cautious about making such a large financial investment
- someone who has recently relocated and is unsure of which neighborhood to live in
- someone who is creditworthy but cannot currently obtain a mortgage and hopes to one day purchase a home but isn’t ready now.
No Money for a Down Payment
If you’re like the majority of home buyers, you will need to obtain a mortgage loan to finance the purchase of a home you are interested in. To qualify for this loan, in general, you must have a decent credit score and depending on the type of loan you are attempting to get, cash for a down payment. Without these two items, the traditional route to homeownership may not be an option for you. Now, don’t give up hope. There are options! One of them is the lease-to-own a home option.
What is a Lease to Own a Home Option
A lease to own a home option is basically leasing a home with “the option” to purchase the home at a future date. The lease to own a home option consists of two parts:
- a standard lease agreement
- option to buy
Here’s a quick breakdown of the items to look for in the lease to own a home option and how it works. The process is certainly more complicated than renting so you will want an experienced Realtor and take extra precautions to protect your interests. Doing so will help you figure out whether the lease to own a home option is a good choice if you are looking for a Lease to Own a Home in FishHawk Ranch or the rest of the Tampa Bay area.
You do Need to Pay Additional Money for the Option
In a lease to own a home option, the buyer usually pays the seller a one-time, non-refundable, upfront fee called the option fee, option money or option consideration. This fee is what gives you the option to buy the house by some date in the future. The option fee is often negotiable, as there’s no standard rate. Still, the fee typically ranges between 3% and 8% of the purchase price of the home. In some lease-to-own, home option contracts, all or some of the option money can be applied to the eventual purchase price at closing.
Read All Contracts Carefully!
It’s important to note that there are different types of lease-to-own home option contracts, with some being more consumer-friendly and flexible than others. Lease to own a home option contracts give a buyer the right, but does not obligate the buyer to purchase the home when the lease expires. If the buyer decides not to buy the property at the end of the lease, the option simply expires, and the buyer is free to walk away without any obligation to continue paying rent or to purchase the home.
Know the Purchase Price
Lease to Own a Home in FishHawk Ranch agreements should specify when and how the home’s purchase price is determined. In most cases, the buyer and the seller should agree on a purchase price when the contract is signed. In general, that price will be higher than the current market value of the home to take into account a history of rising home prices.
What Your Rent Covers
Since the buyer is entering into a lease to own a home option contract it only makes sense that the buyer will be making a lease or rent payment for the home. One of the interesting items in these contracts is a portion of the rent a buyer pays may actually be set aside to be put toward the down payment of the home if the buyer should choose to purchase the home. That amount should be disclosed in the contract. Because of this, the rent may be a little higher than the market rent.
Who Takes Care of Any Maintenance Items
The lease to own a home option contract should spell out who is responsible for maintaining the property, paying for repairs, and paying for any homeowner association fees, taxes, and insurance. In general, it is usually the homeowner that pays most of the fees.
Note: Don’t forget to purchase renter’s insurance!
Ready to Buy the Property
If the buyer is ready to exercise your option and purchase the property, the first item of business will most likely be letting the owner know. From there the buyer will want to start the process of obtaining a mortgage, do a home inspection (yes, even if you were living in the home it is a good idea), and get an appraisal (the lender will order this but it is an important step).
If for some reason the buyer does not want to exercise the option the buyer will most likely forfeit any money paid up to that point, including the option money and any rent credit earned, but the buyer is not under any further obligation to continue renting or to buy the home.
The Current Challenge
The lease to own a home option in FishHawk Ranch may sound great but we do have one small challenge. Most sellers do not want to do a lease to own a home option. There is a lot of risk for the seller and there is no guarantee that the buyer will actually purchase the home.
I think I have a solution for that! I started working with a large, nationwide company that will purchase a home for a buyer and let that buyer do a lease to own a home option. I recently sold one of my listings this way and it was a great process all the way around. The buyer was actually able to choose the home that they loved then rent it back from this company until they will be ready to purchase the home.
Lease to Own a Home in FishHawk Ranch The Guidelines
Here are the guidelines for finding a Lease to Own a Home in FishHawk Ranch
- The home must be located in an approved community. The great news is that FishHawk Ranch is an approved community. There are also other communities in the area that are approved so if you are looking in other areas let me know and I can check if a specific community is approved
- The purchase price of the home must be between $100,000 and $450,000
- The home must have a minimum of two bedrooms
- The home lot must be three acres or less
- The home needs to be a single-family home or townhome
- Sorry, no short sales, REO (bank-owned homes), or homes that are being auctioned
- No material deficiencies (i.e. major structural issues, solid aluminum wiring, etc.). They do send out a company to inspect the home prior to them purchasing it.
Requirements for the Prospective Resident
- Annual household income of at least $50,000
- Proof of stable employment
- No pending bankruptcy
- No disqualifying criminal history (a background check will be done)
- Full Application from everyone 18+ years old
- Application Fee ($75 total per household)
- Supporting documents: – Income Verification – Asset Verification (equal to 2 months of rent)
Give me a call and we can start the process. The first step will be an application with the company that will be buying the home. From there, we can start your home search and find your dream home! Once we find the home you are interested in this company will do some due diligence and put an offer in on the home.
Nationally they have purchased over 7000 homes. I don’t generally endorse programs like this as I feel most of them are scams. I feel different about this program and as previously stated I have closed a home with them. I do feel that this program is a great option for some buyers and I can tell you from my experience with them that they do put in good offers so you will have a chance of getting the home.
If you think this may be helpful for your situation please contact me and we can discuss it further.
Additional FishHawk Ranch Real Estate Articles
- Relocating to the Tampa area? What to Look for When Searching for a Home
- Home Buyers Guide to Real Estate Etiquette
- 10 Tips to Increase Your Home Value
If you found this article beneficial, please do me a favor and share it with others. Thanks for sharing!
About the author
The above real estate article Lease to Own a Home in FishHawk Ranch was written and posted by Jeffrey Gould.
Jeff is a top-selling, nationally recognized REALTOR® and local FishHawk Ranch real estate expert. You will find him selling homes in Tampa Bay, Florida, and surrounding areas. Some of those areas include FishHawk, Lithia, Riverview, Valrico, Apollo Beach, Brandon, and Tampa.
If you are looking to sell or buy a home anywhere in the Tampa Bay area, Jeff is your local and trusted professional.
Jeff can also be reached via text or phone at (813) 421-3007.
Click here for additional FishHawk Ranch information or see other FishHawk Ranch Homes For Sale.
© 2018, Jeff Gould. All rights reserved.