Selling through a lease with option to purchase is an excellent way for both seller and buyer to achieve their goals. The seller receives rent every month (and a little extra!) and, in the meantime, the buyer can try out the house and see if he really likes it. It’s a win-win situation! There are 2 types of hire-purchase contracts: leasing and purchase. The purchase option contract allows the tenant to decide whether or not to buy the home at the end of the rental period. Leasing, on the other hand, is a more binding contract, stipulating that the lessee must purchase the property at the end of the lease period. In all cases, a sale with purchase option gives the buyer time to accumulate the necessary downpayment and establish a financing strategy. If your buyer fails to qualify for a mortgage and you’ve opted for a contract with an option to purchase, he can simply walk away. However, if you’ve signed a leasing contract and need to break it, the paperwork and legal fees won’t be any simpler.
The negotiations
If you’re selling your Montreal home on a rent-to-own basis, you’ll certainly be able to negotiate the terms of the sale to your advantage. You can ask the buyer to take care of exterior maintenance, or even include certain renovations in the contract. Of course, you can’t ask your buyer to take care of everything and anything; first find out about the laws that apply in your area. Together with your buyer, you can negotiate the length of the lease, the additional amount that will be used as a downpayment if the purchase goes through, and the cost of rent and other leasing expenses.
The target audience
Your target audience will be much larger if you agree to sell your property through a rent-to-own program in Montreal, Quebec. Potential buyers will certainly flock to your door, as it’s very interesting for a future owner to be able to try before he buys. Such a contract offers the tenant the opportunity to buy a home after living in it for several years, and that’s good news! They may take the time to fall in love with the property, or realize that it may not be the ideal home for them before making a serious commitment with far-reaching consequences. If your tenant chooses not to complete the sale, you can keep the amount saved for the down payment and re-advertise your property for sale!
Sales price
If you sell your home through a lease with option to purchase in Montreal, and your tenant decides to buy, you will certainly have the opportunity to sign a final contract indicating a higher sale price than if you had sold to a more traditional buyer.
. Indeed, buyers are willing to pay a premium for the opportunity to try out the house, and also to receive a little patience and trust, which will give them the space they need to get their finances back in order. Also, you could lock in a purchase price from the very first signing, thus avoiding stress and monetary losses if the market doesn’t go the way you’d hoped during the few years you’re renting.
Additional costs
If you’re selling your home on a rent-to-own contract in Montreal, it’s normal to include additional rental fees in your contract. This fee must be paid by the buyer in exchange for the right to make a decision at the end of the contract, which usually lasts 3 years. The money paid by the tenant in rent and additional costs is not refundable, not even if the house is ultimately purchased. The tenant also pays an additional amount, which is set aside as a downpayment in the event of a purchase. Most of the time, this amount is non-refundable (so you can keep it!) if the tenant chooses not to complete the sale.
Monthly payments
If you don’t need to sell right away, you could receive a stable income for the next 2 or 3 years if you opt for a lease-to-own contract in Montreal. This monthly income could help you pay your mortgage, or you could simply invest it in a new property. You could also keep the money in a savings account or invest it in a project close to your heart.
