Lease-option to purchase is a popular financing instrument in Florida. In this rental agreement, the prospective buyer has the right to buy a property at the end of a specific period and under certain conditions. However, every state has different laws about the lease option to purchase. To truly capitalize on the benefits of the agreement, you need to know what to look out for before you sign the deal. A real estate attorney in Cape Coral can help you sort out the details and make you understand whether this is the right move for you. Learn here about the essential things you need to know before entering into a lease option agreement.
5 Essential Things to Know About Lease Option in Florida
Understand the Structure of the Deal
Before you freeze the deal, you would want to have complete clarity on the structure of the deal which includes the length of the agreement, the amount of the option fee, which can vary from a few dollars to 20 percent of the value of the property. Usually, the rent is up-market of which a portion is directed towards your down payment for the property. The best way to get clarity on this is to engage a real estate attorney in Cape Coral who can go over the details and assess it for you before you sign the agreement.
Take Appropriate Steps to Improve Your Credit History
In a lease option, you are contending to qualify for a mortgage and be in a position to execute and buy the property. The first step to do this is to ensure that you have a roadmap planned for the purchase. Speak to your lender before you sign the lease-option-to-buy agreement and understand how and when they will credit the money that you have paid to the homeowner on top of your rent payments. This will help you understand how much money you will need for the down payment and closing costs at a later stage.
Also, while you are gathering the amount for the down payment, make sure you improve your credit. Pay your debts, make all bill payments on time and avoid opening new credit accounts during this period. You can consult a board-certified attorney in Fort Myers to know more.
Regulate the Housing Market in Your Area
Property values are prone to fluctuations, so you may want to freeze on a purchase value in advance or agree that the sale prices will be contingent on an appraisal. If you are looking at a property in an area where real estate prices are expected to go up, it will benefit you to lock on a purchase price in advance. However, in a market where the purchase prices are falling, you could end up paying more than the worth of the property at the time of purchase. In such a case, you might face difficulty in securing a mortgage or assembling money for the down payment and closing costs. A real estate attorney in Cape Coral can also guide you on the market regulations to help make a decision.
Learn About the Responsibilities of the Stakeholders
The lease-option-to-buy agreement should spell out the responsibilities of the parties. For instance, it should identify the individuals responsible for maintenance and repairs, homeowners association fees, utility bills, and more. You will need a renter’s insurance, while the owner will have to get a landlord’s insurance. Involving a board-certified attorney in Fort Myers can also help you decipher the agreement for more clarity.
Inspect the Property for Hidden Problems
Getting the property inspected before you sign the dotted line is critical. A thorough inspection will help you identify damages and issues. You can then work out solutions and identify responsibilities ahead of closing the deal. You may have to spend a few dollars, and it may seem like an expensive affair, but getting the property inspected beforehand can save you a lot of money, time, and energy.
We Have the Best Real Estate Attorney in Cape Coral to Aid You!
At Hale Law Services, we have board certified attorneys in Fort Myers who will assist you and guide you throughout the legal process of buying and selling a property in Florida. We have experience and expertise in dealing with complicated real estate transactions to prevent future complications and ensure that you get the best experience.