Elements Of A Lease Option
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A lease option is a two-way contract which provides the landlord with a tenancy agreement with a tenant. An option contract can be an essential part of the lease or can be a separate agreement. The lease options are advantageous since they are low risk and you need little or no money to do them.
The lease options are very flexible. Learning the flexibilities is very vital since one can negotiate win to win deals. There are several fundamental aspects that make up a lease option agreement. Learn more about lease option, go here.
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Lease term is one of the key elements. The lease term emphasizes from when till when the buyer is allowed to occupy the property and for how long the customer is supposed to make lease payment. The lease term can be adjusted.
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Rent credit specifies how much the payment of the contract will be credited toward the purchase price. It also specifies if and when the buyer exercises their option to buy. The customer always wants the rent credit to be high, and on the other hand, the seller wants it to be pocket-friendly i.e. to be low. The rent credit can be adjusted along with the lease payment to come to a satisfactory negotiation.
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Lease payment specifies how much money per a given period the buyer is supposed to pay to the seller so as to maintain their rights to occupancy. The seller wants the lease payment to be high so that he or she can make a lot of profit while on the other hand, the buyer wants it to be low so that he or she can afford to pay. Find out for more info right here.
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Option consideration specifies how much the buyer is supposed to pay for the option to purchase the property. The customer wants the review of the option to be low, and the seller, as usual, wants the opposite. If the seller is willing, there is room for negotiating the option consideration.
Purchase price defines how much the buyer pay if they decide to exercise their option to purchase. This may be set to the specific amount of money. The buyer wants the lowest purchase price.
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Option term describes how long the buyer's option to purchase will be valid. The buyer will want it to be as long as possible, and the seller wants the opposite. A buyer can agree to a higher purchase price in exchange for an extended period to make the payments.
Renewal or extension terms can be agreed separately. The buyer prefers to make renewals without any charges. Take a look at this link https://en.wikipedia.org/wiki/Lease-option for more information.