Los Angeles real estate attorney
Buying a home is the dream of many, but not everyone has the down payment or credit profile to make it a reality. Luckily there are still options. A lease-to-buy or lease-option home is one of several avenues to consider. If you are considering a lease-option home, a Los Angeles real estate attorney can help you with your decision.
What is a Lease-Option Home?
First, it is important to understand what lease-option means. A lease-option is a contract in which the terms allow a renter to buy the property he or she is leasing.
Tenants in lease-option arrangements pay an up-front option fee as well as an additional amount each month that goes toward the down payment. Should the tenant decide not to purchase the home at the end of the agreement, the money put toward the extra money put toward the home’s purchase is lost. Renters are under no obligation to buy.
Lease-option arrangements can be complicated, which is why it is so important to work with a Los Angeles real estate attorney when entering into such a contract. Before moving forward, ask the following questions:
1. What is the Structure of My Lease-Option Deal?
It is important to make sure you understand the terms of the deal, including how long it will take to transition from renter to owner, how much you will pay toward the option fee, and what you will need to pay each month in total as a renter. It is a good idea to have a Los Angeles real estate attorney to review your lease-option agreement before you sign it.
2. How Will You Prepare for the Purchase of Your Home?
Make sure you know how much you will need to pay toward a down payment and closing costs in addition to what you are paying the landlord as a renter so you can work on saving this amount of money. It is also a good idea to focus on building strong credit and doing whatever you can to improve the odds you will be approved for a mortgage when the time comes.
3. What is the Housing Market Like in the Area I am Renting?
Home values tend to fluctuate, so it can help you to lock in a purchase price when you begin renting or agree to set the purchase price at a later date. A Los Angeles real estate attorney can advise you on the best way to proceed.
4. What are My Responsibilities?
You need to know who will handle maintenance and upkeep of the home while you are renting, and how any utility and HOA costs will be paid.
5. Should I Get a Home Inspection?
Lease-option buyers might be tempted to forego a home inspection because they have already lived in the home for some time. Despite knowing more about the home than the average buyer knows, it is still a good idea to get an inspection because it could uncover issues that were not obvious while you were renting. A Los Angeles real estate attorney can help you arrange a professional inspection.