Advice Regarding Lease Purchase Agreement

Buying a property is a major decision. Hence, a lot of people have qualms before buying. In many cases, a property buyer cannot decide right away whether or not to buy a property. A lease purchase agreement can come into the picture. This is a special form of agreement between a realtor and a potential buyer. The latter can rent the property for a certain period of time. At the end of the period, he may decide whether to buy the property or not.

This type of agreement should be written on paper just like any other form of contracts. One has to seek services of a lawyer to draft a lease purchase contract, which states the agreement between the property owner and the lessee. Renters should read the agreement before signing it.

Those who are new to the real estate industry should take the time to learn what contracts must include. A lease purchase agreement should be fair to both the property owner and the lessee. However, unsuspecting lessees may fall victim to misleading contracts. If you want to make sure you are reading an unbiased contract, you may seek services of a real estate attorney. Many of such contracts are sometimes in favor of one party. In general, beware of contracts that are merely presented to you by the property owner. Read the contract and ask questions in case you fail to understand some terms. Do not sign a contract unless your doubts are settled.

Acceptable lease purchase contracts should contain accurate information about the property. Consider the contract as a legal documentbecause it is a legal document. Hence, all information should be correct. Check the names of people, the property name and description, the monetary values, and other details. These are fundamental information and should therefore be checked properly. Do not sign a contract with errors on it. The property owner, of all people, should understand the essentiality of correct information on contracts.

The contract should clearly indicate what happens at the end of the leasing period. Lease purchase contracts should have reasonable exit clauses, wherein the interests of both parties are preserved. However, there is a good chance for these contracts to have biased exit clauses. In many cases, exit clauses may not be completely forgiving. This is because if the termination clause is too lenient, there is a possibility for either party to abuse it. On the other hand, an exit clause that is too unyielding can be detrimental for either party. One example of a disagreeable exit clause involves the lessee losing all the money he has paid while renting the property. As much as possible, exit clauses should minimize losses of either party.

Should the agreement be done in good terms, the lessee or property buyer can have the advantage of living on the property for a specified period of time. During this time, the lessee can check the house if it is worth their investment. This is the time to evaluate the house. There is a mile difference between simply checking out a property on a few visits than actually living in the property for some time. The lessee can either choose to buy the property or simply walk out at the end of the contract.

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