To lease a home with option to buy, sign a lease agreement with a landlord, and add an option to purchase that stipulates the option period duration, the home purchase price, the option fee and how much of the option fee goes toward the home purchase, reports Nolo. Before finalizing the purchase price, have an appraisal and comprehensive inspection of the property done. Hire an experienced real estate lawyer to draft the option to buy agreement.Continue Reading
In an option to buy agreement, the landlord retains the property title, and you sign a typical lease agreement for a specified period of time, explains Nolo. However, the option to purchase gives you the exclusive right to buy the home during a predetermined time period. You pay for this right with an option fee that may be an upfront fee or an add-on that increases the regular rent. The landlord usually puts part of the rent into an escrow account that applies towards the eventual house purchase. Exercise your option to buy at any time during the option period, but if the period expires before you purchase the house, you forfeit the option fee.
Some option to buy agreements stipulate a set purchase price of the house, notes Nolo. In other agreements, you and the landlord conduct periodic appraisals or agree to appraise the house and finalize the purchase price when you decide to buy. Work out the best option for your situation with the landlord and a real estate attorney. If required in your state, record the option contract in a courthouse to encumber the property so the landlord cannot legally sell it to anyone else.Learn more about Finding a Home