Financing and Lease Purchase

Below are options that may be a great way to attract a buyer. If you choose any of these options be sure you email changes@duffyatl.com so we can add it to your listing. These options are all searchable criteria for a buyer.

Financing Options:

1. Owner Financing – You set the terms and become the bank, holding the note. Jim Coyle with Mozley, Finlayson & Loggins charges $750.00 to prepare an Owner Financing Note and Security Deed and file the Security Deed with the appropriate court.
2. Assumable Mortgage – If you have an assumable mortgage this could be very appealing to a buyer with the increased interest rates. Consult with your lender to confirm if this is an option and if you are fully released as a lien holder.
3. Mortgage Buy Down – This is when the buyer pays money to the lender to buy the interest rate down. Sellers can contribute to this cost.

Should I Consider A Lease Purchase?

Note: 2 contracts are used for a Lease Purchase, the Purchase and Sale Agreement, and a Rental Agreement. We help you with the Purchase Agreement as part of the fee that we charge – 1.0% of the sales price and the FMLS fee of .0012 of the sales price. We collect the 1.0% and .0012 of the sales price at the time that the agreement is signed as binding between you and your buyer.  The buyer’s agent, if there is one, will be paid at the closing of the Purchase Agreement, unless otherwise agreed to by you.

A Lease Purchase is a formal agreement wherein a Renter ties up a home that they are renting with the intention of buying the home at a price that is negotiated at the time the renter moves in. You must sell the home if the Renter wants it, at the price and terms agreed when the contract states that the home will close. The current contracts do not have penalties to a Renter if they don’t purchase. We advise that you add a penalty to the contract if they do not close. We recommend 3 to 5% of the sales price as the earnest money/down payment to be noted in the contract as a non-refundable earnest money should they not purchase. If they do purchase, the amount agreed and collected will be applied to the purchase price at the time of sale. You will hold the money during the transaction.

This down payment/earnest money is not the security deposit and you don’t want to write it that way in the contract. The 3 to 5% mentioned above is added to the Purchase part of the contract.

We also recommend that you do not collect more than the rent per month stated in the contract as part of the earnest money/down payment. Keeping your accounting straight makes it much easier to evict the Renter for non-payment of rent.

Utilities are agreed upon at the time of the Rental Agreement.

When the Renter transitions into buying the home, they will contact a lender who will start the process of the loan. The appraisal will be done then. However, unlike a traditional purchase, we would recommend that you write the contract in a fashion that states that the Renter will get the normal home inspection before move-in and the Rental period starting.

Should the buyer not qualify for a loan at that time, you can re-negotiate all terms and do a new contract, if you wish.