As reported on http://www.orlandorealtors.org/ on 5/25/16 by Andrew M. Fisher

Lease-purchase can be an idea solution under certain circumstances, but is strays from the path of a normal buyer-seller transaction. So seller wants to sell and buyer wants to buy, but buyer needs more time to secure financing. Listing agent would like a sale, but, of course, must consider the best interests of the seller.

So in this scenario, how can you get the parties in the transaction to meet their goals? One way is to bring up the idea of a lease with an option to purchase.

Lease-purchase agreements seem to be growing in popularity. I’ve seen six of them come across my desk in just the last month. And while they seem like an ideal solution in certain circumstances, they also pose some risks to the REALTOR® involved.

Lease-purchase agreements stray far from the path of a normal purchase agreement. It’s crucial that you do not negotiate the specific terms of the deal and do not draft the documents, because doing so may lead to the unlicensed practice of law.The Supreme Court of Florida (http://www.floridasupremecourt.org/) permits real estate licensees to fill in the blanks of existing forms contained in TransactionDesk or Forms Simplicity, but NOT to add additional terms, cross out preprinted language, or explain the legal significance of terms. The best course of action is to provide the basic information then refer your client to an attorney to finalize the deal.

In a lease-purchase agreement scenario, the seller needs some comfort that taking the house off the market; remaining responsible for the mortgage; and becoming a landlord may be worth the process. One way to structure this type of deal consists of an option-to-purchase agreement, including a typical residential lease along with a draft purchase contract. There is a buyer-paid, initial non-refundable option fee to secure the option, a monthly rental payment (not related to option, only the actual rental of the home), and a lease-option non-refundable monthly fee.

The buyer agrees to these option fees firstly because they want to buy the house but just need a little more time to secure financing. Secondly, they agree to the option fees because the deal is typically structured so that when the buyer exercises their option to purchase, the initial lease-option and monthly lease-option fees will be credited to the buyer as a downpayment on the purchase price at closing.

With a proper lease option, the seller gets to sell the property soon, and gets paid the initial and monthly non-refundable option fees. If buyer exercises the lease option, seller is ultimately selling the home. If buyer does not exercise the option to purchase, the seller has likely been fairly compensated for the delay in the sale.

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