Q: I have made so many costly mistakes in my life, I write to you now to get your wisdom before making a move to sell my home that may be a mistake.
My home has been on the market for more than 18 months. Frankly, I am starting to feel rather anxious.
A company approached me about a “lease/option.” I would transfer the property to them for 36 to 60 months while they locate a buyer for the home.
This is my first encounter with any such arrangement, and the company’s representative, of course, assures me that this could only work in my favor. Needless to say, I would realize next to no profit. The primary benefit would be that this company would take over the responsibility for the mortgage for the stated period and aggressively seek a buyer.
Please tell me what the negative side of this could be. Also, I will need to find another home that’s smaller and more affordable. Will this lease/option agreement preclude me from getting another mortgage?
A: Unfortunately, what you’ve described sounds to me like a scam. I suppose it might not be, but even if it isn’t a scam, there are tremendous risks for you and hardly any benefit.
If I understand the situation correctly, an agent is suggesting you transfer the title of the home while the “lease/option” company will simply take over making payments on the mortgage.
As long as your name remains on the mortgage, you are legally responsible for making payments. If you transfer title to the property, you will soon find that this company has stopped making payments to the lender and possible has sold your house out from under you.
Do not do this. If you want to lease out your property, put an ad in the paper offering a lease with an option to purchase. If you can’t get anyone to do a lease/purchase, then you have three options: You can simply lease the home until the local market conditions improve, stay in your home until local market conditions improve, or you can drop your price enough to undercut other sellers with similar homes for sale in your neighborhood.
If you lease your home, you should rent another, less expensive home, until market conditions improve and you can sell your primary residence.
If you decide to continue to try to sell your home, you should talk to top area agents about the current market conditions and if your home is currently listed, consider pulling it off the market for the summer in order to freshen the listing. (Homes that stay on the market longer than 6 to 9 months run the risk of looking stale to agents, who may assume there is an underlying problem or reason the home hasn’t sold.)
You’re in a tough position, but your desperation could make you an easy mark for con artists. The scheme you’ve described is often found to be fraudulent. I don’t want to see you hurt, so the safest move is to take a pass.
I havequestion on a 2 year lease with option to purchase my home i paid non refundable down payment and i pay a rent of say 500 dollars a month 100 dollars goes to the purchase price the purchase price was 55 thousand dollars and only 42 thousand dollars if i pay withing 1 year ,but i have a 2 year contract well the company leasing the home sent me a letter statint im not to pay them no more they transfered management to the owner so pay him so i did with in the next wekk this ,my home was sold to another person without me having first offer at 26 thoudand dllars half of what i me and my wife was supposed tom pay i still have the same exact lease for 2 years but she didnt take over management she owns the home i didnot know she was buying the home for 26 thousand dollars i would have handed it to the owner directly ,where they allowed to sell my house to some one else when i have a 2 year contarct locked in behind my back i live in the stste of florida just wondering cause it doesnt seem like she was able to sell i have only been here 8 months and i am still favoring my lease option and rental option ,if im correct i should have got the home offered to me for 26000 dollars not some other lady i dont even know that im sending payments to electronically ?
The thing about a lease purchase with option is that you do not know where your payment is going and if done properly, it was written up for you and the person owning or managing the property and filed with the county that the home is in and you do a quit claim deed to get your name on the deed. That way, if it does go bankrupt, you can claim interest on the home and get your money back. The contract varies per the situation and because there are so many thing you could change in there. A rental has protection for the renter and the lease purchase w/option does not. You need to call an attorney or speak with someone at the magistrate office to figure out what your rights are. Take the contract! If your home is EVER on the home more than 30 days that’s crazy. On your house listed, the price is way too high to have been sitting that long. You should be getting property reports from the agent with the listing though every week. If not you may want to consider doing something different.
Thanks for your comment, Judy.