Yer Blues

Why did the chicken cross the road? Because it didn't have good enough credit to stay on its own side.

Okay, that didn't make much sense, But neither does a lease/purchase. Unless, of course, you can't get a mortgage any other way. And thereby hangs the tale.

So, if you can't get a mortgage through a bank because of bad credit, does it follow that you are a bad risk period? I don't think so, but a lease/purchase has different pit falls for all involved than just making or receiving payments.

First of all, from the seller's point of view, they don't have much to go on except someone's credit, rather like a bank. Even a personal recommendation can go wrong, speaking as an ex-landlord. (don't ask). However, they still retain the deed and all of the perks as mentioned before. And the people that would be most likely to give the lease/purchase would be an owner who doesn't owe their own mortgage. If THEY owe money to the bank and the purchaser defaults, the owner could also default, speaking as an ex-landlord. (It can scare the pants off of you.) On the plus side, in a soft market, as it is now, it may be the only way to sell a property since there is such a glut and young people in particular may have NO credit but may not necessarily be a big risk. If you are a seller, do not go lightly into that dark night. If it is not paramount to sell, don't lease/purchase if you like to sleep at night.

From the buyer's point of view, just read the above paragraph backwards. The only reason a buyer would be seeking a lease/purchase is because they can't get a loan any other way. Do they have bad credit or just no credit. Not quite the same thing, but the latter can lead to the former. Also, the buyer would not hold title to the property and therefore may have reduced rights as to how they can use the property as in altering, remodeling or even having a loud party. You may as well just rent if your home is not really your own. Then there is the question of writing off mortgage interest, taxes and insurance. Forget it. Remember the house is not your own.

And for both sides involved, the contract could be an absolute nightmare to hammer out. With a mortgage, the bank tells you what they can do and you do it or not. And when it comes to the purchase contract, you agree on a price and let your agents do all the fighting.

Where does the real estate agent fit into this picture? Way down in the left hand corner about where that water stain is. If, as an agent, you are lucky, there is money given up front as a down payment and your commission comes out of that. But if the buyer has a down payment, why are they going lease/purchase? You get the picture.

So what about the gentleman moving to Wilmington with DHL that was seeking a lease/purchase? He canceled his second appointment and disappeared.

And I had just started planning that vacation to Aruba.

Life doesn't always turn out the way you planned.