Is this worthwhile for sellers to consider?

With
many people trying to get SOME action on their home, sellers may consider a
lease option.  I thought this point from Candace B.
Pinaud, Leave No Stone
Mortgage Lending, www.LeaveNoStone.com was worth sharing. 
We are strongly urging any one considering a lease with option in the Ann Arbor
Real Estate market to consult with an attorney.  We are helping many clients
simultaneously market homes for sale and lease.  This way, the client can look
at whichever option avails itself first.  As the market slows down a number
of sellers may want to sell their home through a lease with an option to
buy. Typically, the seller will offer
the lessee/buyer that they will devote a portion of the monthly lease toward
the buyer’s down payment.

Example: Lease fee is $1,500 per month with seller
agreeing to credit $200 per month toward the buyer’s down payment a year from
now; equating to $2400 down payment credit a year from now. 

A year later the option is
exercised. The lender will require that
the appraiser determine the fair-market Rent of the property at that time. If the fair-market rent is determined to be
$1,300 per month, $200/month ($2400 annually) may be applied to the down
payment. However, if the fair-market
rent is determined to be $1,500 at that time, then no monies may be applied toward
down payment.

So be careful because the
fair-market rent a year out may be different than it is today!

Click here to search all listings in Michigan with pictures and tours - FREE!

Kathy Toth & Team

www.KathyToth.com

Real Estate One

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