T/B Can Not Buy Out - What Happens?
What or how does it go about, that when the b/t can not buy out at the end of the 12 months?
What type of stuff should be in the contract.
The seller has had enough waiting, one year is just around the corner and still the T/B will not be able to afford to purchase the house. What hapens to all the money that is put away for the purchase Price
What money, and what do you mean by "put away"? The Option Consideration is for the exclusive right (but not obligation) to purchase the house during a set time frame (usually 12 months). The Tenant/Buyer paid for--and received--that right; whether the Tenant/Buyer exercises that Option or not has no bearing on the nonrefundability of the Option Consideration.
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The put away money I meant the optino consideration ( the first d/p and the rent credit monthly. So if the seller decides to stop the lease optino after one year which is on the contract ( lease option for 12 months) at the end of the 12 month lease option contract, the tenants can not qualify for a mortgage or have not saved enough money to be accepted, where does all the money the tenants have gave me, which is to be put towards thier purchase price go?
The skinny is this right? (seller will not extend the contract the t/b are unable to purchase, bye bye t/b they had there chance, I keep the money.
Thanks
Correct.
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How about carrying a mortgage after the 12 months is up? It seems to be a way to salvage the deal and make some more money with the financing. It could be a 30 year amortized with a 2-5 year balloon? LOK, could you give your feelings on this or I will shoot you an email later.
The option consideration is non-refundable if the lease option contract says that it is non-refundable. You need to get a copy of the contract and read it.
Not a bad idea. Just be aware of two things: 1. You will have to foreclose if the Buyer does not perform (if you are willing to take this risk, perhaps you should offer true owner-financing from the beginning and use a wrap). 2. You do not have the right to do so if all you have is a Lease Option with the Seller. Of course, if you have the Deed, you have the most choices.
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