With Lease Purchase Contracts, the seller| is allowed to lease or rent his home to the buyer until closing. A Lease Purchase Agreement is generally used when the prospective purchaser is interested to buy the home but is not still ready or is competent to close quickly. Hence, with this contract, the purchaser can lease the home until he closes. A Lease Purchase Contract lets the purchaser to close somewhere around 12 to 24 months, however, the contract also lets the purchaser to close it before. It is a negotiable contract where the maximum term period is flexible. This contract is favorable to the seller as the buyer has to fulfill one condition, that is, he has to make a non-repayable fee of 3% of the purchase price, this is termed as purchase deposit. This amount shall be further credited against the buyer's down payment of the property. This amount is a rational purchase deposit. Further, this purchase deposit amount can be negotiated amongst the buyer and the seller. This amount can be considerably greater or lesser and this is quite casual. Majority of the property holders as well as the buyer's bother about the instability of Purchase price of the property; they are jumbled if they have to consider the purchase price of today's worth or the future value. Well, the buyers and sellers both choose to fix the purchase price in advance. The buyer can close with loan or cash before the timeframe mutually settled by both in the contract and the seller actually depends on the buyer for closing. Hence, if the seller agrees to increase the time period of the contract, the Lease Purchase agreement calls for increment in the purchase price. A Lease Purchase Agreement is beneficial for both, the property holder and the buyer. It is advantageous for the buyer as he gets sufficient time to collect huge amount for the down payment, clear the previous bills or gets time to sell off some other property. Customers also enjoy "forced savings plan" and this is as a part of monthly rent is generally credited in the purchase price. The amount fixed for monthly rents can be negotiated between both the parties of contract as per the rules of agreement. This contract |is advantageous to the property holder as they enjoy the current top market rates of the property because of the flexibility provided to the buyer on the closing dates. But, there are chances that the monthly rentals may be higher than the market rents and also the buyer has to tolerate all the expenses of preservation and repairs of the property. This is so because, the buyer is the future owner of the property and it is natural that the property holder is relieved from paying mortgage on the property that is unoccupied. Hence, a Lease Purchase Agreement is quite advantageous and secured for both the parties, that is, the buyer and the property holder in the contract. But, each factor related to the property must be examined thoroughly before both the parties sign the contract.
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