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Learn About The Lease with Option to Purchase agreement for Michigan

April 21st, 2022

A lease with option to purchase agreement for Michigan is becoming widely sought after as slack housing demand has forced sellers to get creative in moving their properties.

For those that do not know what a lease with option to pay agreement for Michigan is, it is simply a legal contract that is sometimes simply referred to as a “lease option”.

It is used by homeowners who, if they can’t sell their homes, decide to lease it with an option to buy. This is a powerful method that is being used a great deal in Michigan since it helps alleviate the burden of making mortgage payments by the seller, and allows them to get closer to fair market value for their house, while commanding above market rents during the lease term.

It is also beneficial for the buyer because they are now no longer throwing away money on rent. The lease with option to purchase agreement for Michigan allows the buyer to put down a small down payment (usually 2% to 3%) to get into the home, and grants him or her the right to exercise the option at the agreed upon time so that he or she can purchase the home.

Other terms are often used synonymously or in conjunction with “lease option.” Some of them are: rent to own, rent to buy homes, buy with owner financing, seller carryback, owner financed, seller financing, and so on.

With lease purchase transactions, no banks are involved….the seller assumes the role of the bank and payments are made directly to the owner.

A lease with option to pay agreement for Michigan contract may not be any different than some other states. Many legal contracts are basically identical from one state to another and therefore can be used in those states in which they are the same.

However, there are sometimes differences, but in the case of a lease with option to purchase agreement for Michigan it is probably pretty standard stuff. Of course, check with a real estate attorney.

These contracts will generally have straightforward clauses that most anyone can understand, such as:

“It is agreed that Optionee shall have the right (Option) to purchase said property from Optioner payable in cash or third party financing….at any time during the original term of the Option.”

Other clauses may state things like:

“If the Option is exercised during its term, all Option fees paid by the Optionee shall be applied towards the purchase price, Optionee’s closing costs, and/or down payment at Optionee’s choice.”

Sometimes investors will also use variations of the lease with option to purchase agreement for Michigan by getting a house under contract and then assigning their interest for a modest fee to the end buyer of the home who becomes the tenant-buyer.