With our tough economic times, buyers are becoming more creative in the quest for home ownership. As I’m sure you know, it has become much harder to secure a loan in today’s Real Estate Market. We have clients that are looking to take advantage of this tremendous Buyer’s Market and can not get a loan. I’m talking about people that have great credit, money in the bank and assets. If you don’t have enough current income showing to meet the requirements for your loan, you can be turned down. One of our clients has enough money to pay cash several times over and still can not get a loan. As our economy recovers, I’m sure loan requirements will change. One way is to do a Lease Option. We are seeing sellers get more creative and are starting to work with the buyers to allow them to lease the property and apply a portion of the rent towards a down payment. A typical example would be to lease for 5 years and apply 20% of the rent towards a down payment. Within the 5 years, the buyer has the right to secure a loan at anytime and pay the seller the agreed upon price. If the buyer does not go forward with the purchase, they forfeit the credit for the down payment. The seller may also want the buyer to put down a deposit for this option and forfeit that deposit if they do not choose to go forward with the purchase. This would give the buyer some incentive to purchase and if the seller will agree to lock in the sales price, it could be a great deal down the road. An example would be if you agreed to a 5 year lease with a purchase price of 250k. At the end of the lease, the home appraises for 375k and you pay the agreed 250k. The lender would be pleased to do the loan and the buyer would have some nice built in equity. Not all sellers would be willing to lock a sales price at the start of the lease but if you can negotiate this, you may have a real winner!