What does “renting with an option to buy” mean?

re: What does “renting with an option to buy” mean?

malanoza — Sat, 02 Feb 2008 14:58:51 GMT

There are varying laws in every state of course, so I can only give you a perspective from Georgia. We are a non-judicial foreclosure state, and there are others as well with similar procedures for defaulted mortgage loans. This is very important when determining whether a Lease Purchase as we call it is right for you.

Because the courts are not involved in foreclosures it is relatively easy to go through the whole process in a few months. Since the Lessee does not actually own title to the property it is not very difficult for the Lessor (owner) to continue to collect payments from the tenant while not making mortgage payments at the same time. This type of criminal behavior has occurred many times in the Atlanta market and it has been a very sad and sometimes tragic day when I have arrived at someone's door to post the foreclosure and voluntary eviction notice. The occupants are often totally unaware that the property has been foreclosed on and often this happens shortly after they have made their timely payment to the owner. Since the Lessee is not in default on the Security deed they have no recourse to prevent theforeclosure and must vacate before the couty auction occurs.

With that very real possibility in mind, you should know with 110% certainty that you can trust the person(s) who you make a Lease Purchase agreement with......at least here in Georgia.

re: What does “renting with an option to buy” mean?

jcombs — Mon, 28 Jul 2008 19:44:12 GMT

I agree with the previous commenter. It is similar in North Dakota and Minnesota though the process to foreclose can be done in court. Make sure you understand you don't own the house and it can be complex to follow up on getting the sale. Have an attorney draft your contract for deed and be sure you record it in the County Recorder's office as soon as possible. I would never personally do this as a real estate transaction, especially since lending rules have become so easy to get mortgages.

re: What does “renting with an option to buy” mean?

lalaland_mamma — Tue, 23 Sep 2008 01:27:48 GMT

I would have to agree with "malanoza". This happened to my husband and I, we had to move in 7 days with our 2 young children. We lost thousands of dollars. The only recourse was to sue to get the money we paid to the landlord back through breach of contract. Which we still have been unable to recover. :(

re: What does “renting with an option to buy” mean?

SchaalBWife — Fri, 19 Dec 2008 07:29:48 GMT

Our Realtor told us that "lease with an option to buy" offers were usually a scam. She said that landlords use it to get more money out of their renters. The land lord is supposed to be saving that extra money you paid so that at the end of your lease the landlord can use it toward your down payment and closing costs. But... if you get to the end of the lease and you can get approved for a loan or you don't have enough for a down payment then usually your out all that extra money you paid...

re: What does “renting with an option to buy” mean?

best-nester — Sat, 10 Jan 2009 08:10:55 GMT

thanks for the info

i was thinking about going that route now I'm not so sure after reading your post. Guess I'll research it more, since it varies from state to state.