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Basic things you should know about a lease purchase contract
What exactly is a contract?
By definition, a contract is an agreement between two or more parties to do, or to refrain from doing, a particular thing in exchange for something valuable. The parties can be individuals, businesses, organizations and government agencies.
They key elements of a successful real estate contract:
1. Offer and acceptance
This implies original signatures with no alterations to the contract. Don't mistake offer and acceptance for counter-offer. When the original offer is marked up and initialed by the party receiving it, then signed, you got a counter-offer and not offer and acceptance. When you come to a final agreement, you should rewrite the contract according to the agreement and this contract must be signed by both parties.
2. Consideration
Usually, money is the form of consideration people use, but sometimes, a promise to perform/pay is also good. .
3. Written contract
All real estate contracts must be in writing. In order to write a good real estate contract, you must keep in mind these things:
You must write the full name of the parties on the contract and thus identify the parties.
You must have the legal description on the contract. Sometimes, the address will do, but it's preferable to have the full legal description. By
having this on the contract, you will have the property identified.
You must have the amount of the sales price on the contract.
The contract must be signed by all the parties involved, or it won't be enforceable.
Keep in mind that minors, drugged persons, mentally unfit etc, cannot sign any contracts. Make sure that all the parties involved are competent.
Make sure all parties know the essential details, rights and obligations that are stated in the contract.
What exactly is a lease purchase contract?
Lease purchase contracts combine the basic lease contract with the option to purchase and, during or at the end of the lease period, it gives the tenant/buyer exclusive right to buy the home under the terms to which both parties agree in the contract. But first, the tenant/buyer have to pay the landlord/seller a non-refundable option deposit that is applied to the purchase price of the home. Then, the tenant/buyer pays a sum that is typical to the rental amount and usually, it is done on a monthly basis. A portion of that monthly payment is applied to the purchase price of the home.
About the Author
Amanda Shoemaker owns a great directory of lease and lease purchase properties and houses for rent. Visit her site at http://www.leasebeast.com
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