Lease-options: the good, the bad, the ugly

REThink Real Estate

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Q: I owned a home for eight years, but borrowed heavily against it, took a subprime loan and recently lost it through foreclosure. My credit is shot from the foreclosure, but I have found another home I would like to buy. The seller will agree to do a lease-option, and I think it sounds like a great way to buy. What are the pros and cons of a lease-option that I should know about? Are there any pitfalls I need to beware of? A: A lease-option arrangement may present a great opportunity for someone who has just gone through a foreclosure to immediately regain some of the benefits of homeownership. Before you enter such an arrangement, though, I'd urge you to cultivate order and clarity in your financial and life plans, and take several steps to protect your pre-purchase investment in the property. Mindset Management I recognize that due to your foreclosure, you might need to move quickly, and it seems ideal to move directly into a property under a lease-option. Before you agr...