Agreement Lease Purchase, Renting to Own

An ideal purchasing agreement for credit-strapped people is the rent-to-own or agreement lease purchase. It's one of the popularly used methods to acquire or sell a house at present. It gives you the option to lease or rent the area and later purchase it with the accumulation of payments made. In other words, it's paying your house in installments. Normally, the installments are paid every month though some opt to pay it quarterly in a year until the whole purchase price is paid.

It is only when the purchase price is complete that the title of the land will be transferred to your name. This is to ensure that you regularly make payments or the property won't be yours. Normally, you would have to make a down payment which is bigger than the installments. Yet, there are other property owners or real estate developers, that don't require a down payment as long as you sign the lease purchase agreement and comply with the payment of installments.

Similar to any leasing agreement, the lease purchase agreement stipulates rights, obligations, policies, conditions and terms that have to be agreed upon by both parties. The problem with lease purchase agreements however, is that most of the timer, the down payment and installment are non-refundable. In case you fail to pay on time after the grace period or when the seller demands payment, you will be forced to vacate the property without refund.

The good thing though, is that a lease purchase agreement gives you the option of purchasing the property or not. Also, unlike simply renting an apartment or house, property rights and ownership is transferred to you after a certain period of time and after complying with all the requirements. Another advantage stipulated in rent-to-own agreements is that you don't have to pay taxes on the property because this is paid by the owner. Until the title remains in the hands of the seller, you are considered merely as a lessor until you have completely purchased the property.