Pros and Cons of Lease to Own Homes: A Guide for Potential Buyers

The “lease to own” option in real estate can be an enticing approach for many prospective home buyers, particularly for those who may not qualify for a traditional mortgage. However, like any financial arrangement, it comes with its own set of pros and cons that potential buyers should consider carefully and hire a real estate attorney to protect your interest in such a type of purchase. Texas Licensed Real Estate Agents DO NOT/CAN NOT assist Consumers with Lease to Own purchase transactions. Texas Real Estate forms are written and promulgated by attorney's  - 

Pros of Lease to Own

• Building Equity: As part of your rent goes toward the purchase price, you begin building equity in the property even before you officially buy it.
• Locked-in Purchase Price: The price of the home is predetermined, which can be beneficial in a rising housing market.
• Time to Improve Credit: It provides time to improve your credit score and financial situation to qualify for a mortgage at the end of the lease.

Cons of Lease to Own

• Forfeited Payments: If you choose not to buy the home at the end of the lease, any extra payments made toward the purchase price may be lost.
• Purchase Obligation: Sometimes, lease agreements require you to purchase the home, making it crucial to be certain of your decision.
• Market Changes: You are still locked into the agreed purchase price even if home values decrease.

Protecting Yourself

To safeguard your interests in a lease-to-own agreement, consider the following steps:

• Engage a qualified real estate attorney to review the contract.
• Ensure that lease terms, including the purchase option, are clearly stated and understood.
• Conduct thorough research on the property and neighborhood.
• Attend regular inspections to assess any repairs needed.
• Save every piece of correspondance and communitcation between you and the deed holder from beginning to end

Approaching a lease-to-own agreement with diligence and informed decision-making can be a strategic way to secure your dream home. For tailored real estate guidance with traditional financing, feel free to reach out to Marcie Lowery at Realty Texas. Contact me at 512-629-0899 or 903-626-0060, email me at marcie-lowery@realtytexas.com, or visit my website at marcie-lowery.realtytexas.com. Real Estate Agents do not provide legal advice and the content in this blog is informational only and Consumers should do their due diligence and seek legal advice with Texas Real Estate Attorney.