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WWYD another question

Posted by palimpsest (My Page) on
Fri, Jun 8, 12 at 14:10

I have been approached with a potential Lease-Buy. I know these usually work in the favor of the seller.

All I can see is at the end of the lease period I get it back, they lose the money they put into it, and it's not in the condition I left it to them, and then I try to sell again.

Also I thought because of the circumstances, Lease-Buy offers tended to be strong offers, but this is a weak offer compared to the listed price.

Follow-Up Postings:

RE: WWYD another question

I wouldn't do it unless the the amount they pay is much higher than you are indicating. There should be a significant amount of each monthly payment they would forfeit if they didn't buy within a couple years so it would be an incentive for them to buy! Otherwise, don't fool's being RENTED....what you said you DIDN'T want to do.

RE: WWYD another question

It's hard to say without having hard numbers. Do you feel comfortable sharing them? Namely:
-asking price
-monthly fees
-market rent

-offer price
-offer rent
-other offer terms (how much of rent towards down pmt, etc.)

RE: WWYD another question

This was not a firm lease purchase offer.

But I will say it was more than 20% under listed price, with Rent at market value only.

From what little I know, the offer is supposed to be stronger than what someone would offer with a clear sale and there should be a high enough non-refundable premium in addition to the market rent that goes toward the purchase, that the lessee is discouraged from defaulting.

I turned this one down as it was initially put forth. As redcurls said, she would essentially be renting it with the terms they offered with no incentive to stay.

RE: WWYD another question

Yeah, there should be some "extra" rent that goes towards a down payment.

A twist on a "rent to own" would be a lease with an option to purchase, in which case they'd just pay market rent and have the option within a certain period of time to buy it at an agreed-upon price. But it would need to be at a price acceptable to you, which I'm assuming 20% below list isn't. This option is actually more preferable for the buyer, because if the market value goes up they get a good deal down the road, and if it goes down they can not take the option, or negotiate a lower price with you.

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