Pros and Cons of a North Georgia Lease Purchase Contract

Lease AgreementShould I Buy or Sell a Mountain Home or Cabin through a Lease Purchase Contract? This is a question that I get from time to time from potential North Georgia Buyers, Sellers and Real Estate Agents. Before entering into such a transaction you need to know the “Pros” and “Cons” of a Lease Purchase Agreement.

The very first thing to acknowledge is that Most Lease Purchase Agreements Do Not Close. In over 30 years as a Real Estate Attorney, it has been my experience that very few of these transactions ever get to the closing table.


The benefits to the buyer include using the interim time to pass capital. Most Buyers in a Lease Purchase Agreement do not have the down payment. That is why they want to purchase this way. One definite advantage is for the Buyer to negotiate how much of the monthly rent will be credited toward the down payment. I have seen everything from a high of 50% to a low of 10% of the monthly payment to be used as part of the down payment.

Another advantage, that is until recently, is that the value of the property will probably increase over the term of the contract. This increases the Buyer’s equity while allowing the Buyer to buy the property at a set price negotiated at the time of signing the contract.

The Buyer will also have the ability to “Try Out” the house. Every house has idiosyncrasies. This allows the Buyer time to live in the house, learn about it but not have the responsibility for most of the things that can happen to a house over time. Every neighborhood is different. A Lease Purchase gives the Buyer time to know the neighborhood.

The Seller gets to have a contract now, have someone in the house so that it is not abandoned and have the income coming in to pay the mortgage and utility bills. The monthly payment may even be high enough for the Seller to have a “Profit” after paying the bills on the house.

MY NEXT NOTE – I will address the drawbacks and problems with a Lease Purchase Agreement.

Guest Authored by Byron Wyndham of Wyndham & Associates

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