FOR SALE or LEASE TO BUY

04/10/08

I have been driving by this sign on a property for some time and all I can say is, why would any seller offer the Lease to Buy option? To me, it potentially invites only (lots of) potential trouble for an owner.

Although it sounds like a creative way to unload a property, I would guess that a seller is taking a BIG risk if he or she entered into a Lease to Buy agreement. I can only see one possible way this might make sense, but all the other ways only look disastrous to me.

The main problem is the category of buyers needing a Lease to Buy arrangement most likely is a financially challenged "group" in general. This probably means that the property might become "at risk" on any number of fronts: Condition, maintenance, appearance, and several other areas all come to mind. Abandonment by the Lessee/buyer might ultimately result, leaving an owner with a considerably deteriorated asset from which he or she might never see any satisfaction.

Concluding, as creative a Lease to Buy offer may sound, without iron clad protections written into such an Agreement - these alone would scare off any marginal candidate - I cannot imagine many, if any, positive reasons for an owner to offer this method as a way to unload a property. Only a straight sales contract is advisable so as to take him/her completely out of the asset at the closing.

Incidentally, comments are welcome on any of my columns and you can email me at robin@robinleechrealestate.com anytime.


©2008, R. Leech features.