Buyer Q & A - How does a lease option work?

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How does a lease option work?
"Hello Trulia- my husband I didn't qualify for a mortgage this year because our 2008 tax return shows too many deductions and too little income. Our mortgage broker said we will definitely qualify next year after we file our 2010 tax return with more income b/c that averages will average with 2009, which is good. We want to buy a house, and are ok with waiting until next year, but a really great house just popped up on the MLS for a great price. We were wondering how a lease option works, the idea being we lease it for 3-6 months and then buy it. Any advice would be appreciated- thank you!!" This question was posted on Trulia by an Orange County prospective home buyer. Here's my answer:
Lots of good advice here! In addition, do you know what type of sale the great house that just popped up on the MLS is? If it is a Short Sale or an REO listing, a lease option will probably not work. In the case of a Short Sale, the seller is trying to sell their home before it goes to foreclosure - so they want it sold as quickly as possible. And most banks will not consider a lease for any period of time. Somewhat the same with an REO - the bank wants the property sold and off of their books.
I would make sure you are concentrating on Standard Sales - sellers who have equity in their home, and can work with you to structure a lease option. Currently, there are 114 Single Family detached homes available in San Clemente that are not Short Sales or REO - ranging in price from $440K to $5.8M.
Hope this helps. Leslie 949-678-3373
Here's the whole blog: http://www.whatagentsfeartellingyou.com/buyer-q-a-how-do-i-buy-a-lease-option/
Here's a link to the Trulia question:
http://www.trulia.com/voices/Home_Buying/How_does_a_lease_option_work_-246426

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