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Rent With an Option to Purchase?

We have been asked by clients about the possibility of renting with an option to purchase.  Sometimes, the potential buyers have an upcoming life event that will allow them to make a purchase in the next few years, but they have found their dream home and want to tie it down and live in it now.   

There are many ways to structure such a transaction but the most common one works like this: The tenant/buyer enters into a contract at a set price and puts down a non-refundable deposit (amounts can vary widely) and a portion of the rent goes towards the purchase price should the tenant/buyer decide to purchase within the set timeframe.

Should the tenant decide not to close within the specified time, they lose their deposit and the transaction is simply a lease. Should they decide to purchase at anytime during the lease term, they have been building up equity in the house and pay the balance due upon closing. This can be a creative way for both  buyer and seller to reach their goals.

We have successfully completed transactions using this structure. Give us a call if you are looking for other creative financing ideas!

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