The Philadelphia area has seen a nice increase in home sales activity and prices. Yet with all the good news around, some homes might not be experiencing this quick sale. Some of our luxury communities, such as Chestnut Hill, Roxborough, Manayunk, Torresdale, and others offer unique, custom homes and finding the right buyer is sometimes a bit harder. If you are finding yourself in this position, one option you might not have considered is a lease-option.
A lease-option is an agreement which gives a potential buyer the option to buy your property at a future date at an agreed upon price and terms. The buyer gives the seller a non-refundable option fee and there is a set amount of time for them to exercise the option to buy. At the end of the time frame, the buyer must buy the home or forfeit the option fee. Although not always, typically the buyer will live in the property during this time and pay rent to the seller.
Who are these Philadelphia buyers that want lease-options? There are many reasons why a buyer might want to ask for a lease-option. Sometimes they are unable to qualify instantly for a conventional home loan. They might own another property they need to sell, or they are still saving for a 20% down payment. Often relocating clients are interested in a lease-option to allow them to “try out” the neighborhood before buying a home. Each situation is different, and your investor or agent will help you qualify potential buyers before you enter into an agreement.
What are the advantages for the luxury home seller?
- Sellers often get better sales prices and terms by being flexible to buyers unable to buy other homes
- You receive rent on a home that might be vacant otherwise
- The buyers will care for the home like it is their own, because it eventually will be.
- It offers protection against a down turn in the market as price is agreed to up front
- If the buyers do not exercise the option, you have a non-refundable fee to offset any time lost
- Some properties will sell under a lease-option that will not otherwise sell in a traditional sale
- Buyers are motivated to complete the option or lose a large option fee
A lease-option is just one of the tools available to sell a property that is sitting on the market. Structured properly, it will protect you from any possible loss while creating cash flow. A lease-option is just one way to attract more buyers to a property which might not sell as quickly as needed. CLICK HERE TO RECEIVE A FAIR OFFER ON YOUR HOME TODAY!