Discounted Price $475,000

People have used this strategy to buy real estate for many years. It tends to become more popular as lending restriction get tougher, as we can see in this current market. 

Lenders have returned to a much stricter loan approval process, and homes do not sell as quickly and easily as in recent past. For these and other reasons lease option or rent with an option to buy has grown in popularity.

This is also because rent-to-own homes offer a classic win-win arrangement for both home buyers and sellers. It can offer home ownership solutions for buyers needing an affordable track to home ownership, while offering the sellers a healthy way to keep the property under careful tenant care until final sale.

Lease option or rent-to-own transactions are different from a traditional home sale. The buyer/renter enters into an agreement with the owner or landlord to buy the property by a set date in the future. Typically 3 to 5 years down the road.

Buying a home with a lease option includes these steps:

Buying a home with a lease option includes these steps:

1. Agreement of a purchase price: a home acquired in a Lease Option transaction, the buyer and seller agree on the home’s sale price and other terms.
2. Down payment (10% to 50%) - To lock out other buyers. The buyer will pay the seller a down payment fee for the right to buy the home. This Option Fee prevents the seller from selling or offering the rent to own home to anyone else. Securing the home is yours! The down payment will be 100% credited when buying the house, just like a regular mortgage. 
3. Agreement of monthly payment: The monthly payment will be determined by the amount of down payment put onto the property, just like a mortgage. The more down payment, the lower the monthly payment.  
   
4. Occupy the home as a Tenant / Buyer: The buyer then occupies the home as a renter and pays the seller monthly rent for an agreed length of time. (1-3 years) any time within the agreed years, the tenant-buyer can get a new loan or sell the house. All the equity that has been gained is the Tenant/Buyers. 

  The paperwork and agreement that are a part of this process typically breaks down into four steps.

1. Application
2. The Rental agreement which outlines the terms of your tenancy while renting the property.
3. The Option agreement to identify the time period and purchase option down payment fee.
4. The Contract of sale to spell out the purchase price and terms of sale.

Each one is an  important part of the lease option to purchase agreement and should provide both the buyer and seller the protection needed to complete the transaction.