Arizona homes for sale

The lease option to buy February 25, 2002 Often the biggest obstacle to becoming a homeowner is coming up with enough cash for a down payment. One way for cash-strapped home buyers to realize their dream is to lease a home with an option to buy. Here's how a lease option works. The buyer (called an optionee) leases the property from the seller (called an optionor) for a period of time. The lease contract gives the optionee the right to buy the property at the end of the lease period, or earlier by mutual agreement, at a price agreed upon in the contract. The optionee pays a sum, called option money, to the seller at the onset of the lease. This money is applied to the purchase price if the option is exercised. The option money is forfeited to the seller if the optionee doesn't go through with the purchase. Like any contract, the terms of a lease option are negotiable: the length of the lease, the amount of the option money, the purchase price and the rent. Sometimes, a seller will agree to credit a portion of the rent toward the purchase, providing an additional incentive for the buyer to go through with the purchase. Even though the amount of the option money is negotiable, it's usually less than the down payment amount required to purchase an equivalent property. So, for relatively little upfront cash, a lease option allows the buyer to tie up a property at today's prices, and live in it before deciding to buy it. During the lease period, the seller cannot sell the property to another buyer. HOUSE HUNTING TIP: If you're buying in a market where home prices are rising, a lease option might be a great deal. But, you could end up over-paying for a property if market values decline between the date you agree on a purchase price and the date you exercise your option. There are two parts to a lease option agreement. The first deals with the terms of the lease. The second deals with the terms of the purchase. Be sure to include contract contingencies to protect yourself, such as for financing, inspections, and the sale of another house. Home buyers who have a house to sell in another location might be able to use a lease option to their advantage. Let's say you need the equity out of your current home in order to buy a new home. If the market is slow in the area you're leaving, it might take some time for your home to sell. A lease option gives you a place to live, time to sell your home and a guaranteed right to buy the property at an agreed price. Don't be surprised if you don't find a lot of listings offered on a lease option basis. In a seller's market, listings usually sell quickly for all cash. But, lease options do become popular in soft markets when sellers are having a difficult time selling. Regardless of the market, if the sellers need cash from the sale of their home to purchase another home, a lease option probably won't work. But, you may be able to create a lease option opportunity by searching the "homes for rent" ads for a landlord who can be convinced to give you an option to buy. THE CLOSING: Since you forfeit your option money if you don't go through with the purchase, don't option a property that you have no intention of buying. Negotiate a straight lease and save your option money for a home you're serious about buying. Dian Hy mer is author of "Starting Out, The Complete Home Buyer's Guide," Chronicle Books. Copyright 2001 Dian Hy mer Distributed by In man News Features   More - Real Estate Columns   FREE reports on homes sold in your zip code Arizona Homes - All available zip code reports Chandler Homes Gilbert Homes Glendale AZ Homes Goodyear Homes Mesa Homes Phoenix Homes Scottsdale Homes Sun City AZ Homes Tempe Homes   FREE custom-made reports on homes for sale Metro Phoenix Southeast Valley. Homes for sale in Ahwatukee, Chandler, Gilbert, Mesa, Queen Creek and Tempe. Phoenix. Homes for sale in Anthem and Phoenix. Southwest Valley. Homes for sale in Avondale, Buckeye, Goodyear and Litchfield Park. Northeast Valley. Homes for sale in Carefree, Cave Creek, Fountain Hills, Paradise Valley, Rio Verde and Scottsdale. Northwest Valley. Homes for sale in Glendale AZ, Peoria AZ, Sun City AZ, Sun City Grand, Sun City West, Surprise and Youngtown. Wickenburg homes for sale. Metro Tucson Tucson area. Homes for sale in Marana, Oro Valley and Tucson. Green Valley area. Homes for sale in Green Valley and Sahaurita. Other Great Arizona Towns • Casa Grande homes for sale • Flagstaff homes for sale • Lake Havasu City homes for sale • Payson homes for sale • Prescott homes for sale • Showlow homes for sale • Yuma homes for sale