Choosing a Lease to Own Company

1.  Make sure the company you’re considering has quality in-house realtors, mortgage brokers and lawyers etc.

Quality people bring quality results, making sure your company has such real estate professionals is important since realtors and mortgage brokers are regulated and must follow a code of ethics.  Your interests are important and you need to ensure you’re dealing with leading real estate professionals who are experts in the Lease-to-Own process.

2.  Be sure the Lease-to-Own Company offers full disclosure on how they operate.

Make sure they disclose price, credits, and terms for each one of their listings so nothing is left up to the unknown.  It is also beneficial if the company is up front about how they make their money within their real estate transactions.  Operating on full disclosure allows the client to decide whether they want to do business without any questions or hard feelings coming after a deal is signed.

3.  Make sure the company provides you with someone who will help you repair your financial situation.

Rent-to-Own process comes down to three steps, to repair your credit, build a down payment and eventually qualify for a mortgage within a certain period of time.  By working with a mortgage broker this will greatly enhance your chances of qualifying for a mortgage since they take a careful look at your situation and work with you to develop a plan you can follow towards home ownership.

4.  You need to consider the depth of experience the Lease-to-Own company has.

What is the company’s history?  How many years have they been in the real estate investment industry?  The Lease-to-Own system is a powerful tool but only when executed correctly.  You need to protect your investment and ensure that who you are dealing with has extensive experience. They need to have the proper legal documents in place and have a full understanding of the CMHC guidelines in order to make your transition into home ownership seamless.

5.  Your company should have a Lease-to-Own program which allows you to build equity through the accumulation of your monthly credits.

During the Lease-to-Own process the company should have a program that lets you build equity through the accumulation of your “monthly credits.”  A standard percentage to credit back on the total lease payment is from 10 to 25%.  This number is calculated on a home by home basis.  The larger your deposit, the less you will need to pay monthly.  The lower your deposit the more you will need to pay monthly.  This is necessary to build the required amount of downpayment for your lease option date.  You will find this important information in your “Option to Purchase” Agreement.

6.  Consider the term that the Lease-to-Own company is offering you.

Be cautious of a company that is offering you a term anymore than 3 years.  It shouldn’t take more than 3 years to repair your credit score nor should it take that long to build your down payment.  If a company is pushing for anything more than a 3 year term, they are generally just taking advantage of the situation you are in.