# Seller Finance the same as Lease Purchase?



## Tango (Aug 19, 2002)

Well, not even 24 hours and I have a question. When I listed my proeprty for sale yesterday, the agent and I spoke if financing the sale on a full price offer. I said 20% down in order to finance it. When I went to close my gate in the evening, I noticed the for sale sign has "Lease Purchase" on it. I thought lease purchase was signing a lease and paying a premium for an option to buy it later but not necessarily buying it. Will be calling the agent in an hour but wanted to see if anyone could help me understand how or if there was a misunderstanding....


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## farmerj (Aug 20, 2011)

Only misunderstanding I see is on your side.

Need to sit down with the agent and get terminology and meanings clarified between you two before dealing with a buyer.


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## Tango (Aug 19, 2002)

yeah, i see the need to keep the reins real tight on everything right now. looking at "lease purchase" online it is not at all what i thought i was talking about. the word "lease" never entered our conversation.


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## farmerj (Aug 20, 2011)

I guess I shouldn't say it's all you.

But the two of you need to clarify at the least this morning.

Bring him coffee and rolls to open.


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## Tango (Aug 19, 2002)

thanks. this is all crazy. imo, there is no misunderstanding, i was just trying to be nice about it. putting a lease purchase sign up when no lease purchase was discussed is a gross misrepresentation....


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## DAVID In Wisconsin (Dec 3, 2002)

In some states land contracts are illegal and the new laws taking effect on Jan 1st will make owner financing hard. Often a lease purchase offers better protection for the seller. It is generally much easier to re-gain possession of the property if there is a dispute. The tax bills would still come in your name so you would know if they are delinquent. The difference in terminology between seller financed and lease purchase could be extra protection for you.


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## farmerj (Aug 20, 2011)

Well, you are paying them to market your place.

Telling him you seller finance for 20% down is a possible lease


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## Tango (Aug 19, 2002)

thanks for the help. i spoke with the agent just now and she said it is basically the same - the terms and conditions are negotiable and my attorney can draw up the contract. maybe i'm a bit jumpy.... but i've suddenly found the brakes in this rollercoaster n i might over react for a while


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## 1shotwade (Jul 9, 2013)

Owner finance usually indicates a land contract. Other than that there is rent to own and lease option to buy. They are all different things and have different implications and they are all different in each state.For instance with a lease option to purchase it takes the burden of maintenance and repair off the seller and it becomes the responsibility of the buyer.The good news is that nothing is set in stone and agreements can be written up that takes into account individual changes you would want to incorporate into the contract.You will need to sit down with a real estate attorney in your state and get just what you want in this contract before you offer it up to the market.Once you sign an agreement you're stuck with it.There are so many things you don't think about until it's too late and you need to take care of this right or it could come back to bite you.

Wade


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## sidepasser (May 10, 2002)

I am doing a owner finance on the sale of my property. It is NOT a lease purchase and it is NOT a Contract for Sale. 

I am acting in the same role as a bank. I have a promissory note, a Deed to Secure Debt and so forth. 

A lease purchase is not the same as a owner financed loan agreement (similar to a bank). A contract for Sale is not the same as there is no ownership until the purchase is paid for (well there is as laws have changed, but on the whole, it is not the same as a bank loan).

You should make very clear exactly what you want. Have you spoken to an attorney who specializes in real estate? If you are owner financing (similar to a bank) your attorney would be able to advise you and draw up the deeds, contracts, bills of sale and promissory notes that you would require. My attorney did not even charge me, it was all covered in the closing costs which were picked up by the buyers. Advertising a lease purchase might hinder the sale of your property as most people want to OWN the property while they are paying on it. There is a difference regardless of what a realtor may think. speak with an attorney and get the facts.


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## sidepasser (May 10, 2002)

I did google lease purchase in TN - there was a piece done in TN on a local TV station:

http://www.wmctv.com/story/14848784/the-investigators-dont-do-it

Here's an article on Trulia: http://www.trulia.com/voices/Home_Selling/How_do_I_get_a_lease_agreement_to_lease_purchase_m-374632

I was advised against doing a lease purchase as too much can go wrong with them.


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## Tango (Aug 19, 2002)

sidepasser said:


> I am doing a owner finance on the sale of my property. It is NOT a lease purchase and it is NOT a Contract for Sale.
> 
> I am acting in the same role as a bank. I have a promissory note, a Deed to Secure Debt and so forth.
> 
> ...


thanks sidepasser. what is becoming increasingly clear is that there are different ideas for these terms which i used to think were explicit.the real estate agent said the words on the sign bring more interest in. i have an attorney that will draw up the contract and i have had the experience already of being on the losing end of a contract previously even though i was the owner and i was financing, so this time i chose an attorney whose contract i have already read and i will not agree to terms where i am once again taken advantage of. i have given and given and others seem to like taking but there's a limit to all things and i'm there now. ive reached it.


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## 1shotwade (Jul 9, 2013)

The last place I sold was in ohio on a lease-purchase-balloon. The leaser was responsible for all maint/upkeep Paid 2% over the bank rates at a reasonable monthly payment and the Balloon (Lump sum) due in 3 year.Ohio's law allows the leaser to have "no vested interest" until they have paid a minimum on 10% of the purchase price and it allows for a 3 day eviction for none payment.Things like this vary from state to state so don't rush. Sit down with the atty. and make sure you understand EVERYTHING before you do this.

Wade


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## ChristieAcres (Apr 11, 2009)

Yes, states can be different on terms/laws. A Lease Purchase requires a Lease Contract and an Intent to Buy at a given date. This is similar to renting until purchasing. Here, none of the monthly payments are required to be credited to the purchase (unless the contract states they will). If the Contract is violated, the Earnest Money is usually forfeit, and sometimes litigation can result based on the terms. A Lease Purchase Option is similar to a Lease Purchase, except it allows for the Buyer (s) to buy or walk away on the determined date (usually, there is an automatic forfeit of Earnest Money). With this, usually no other recourse.

As a Realtor, who lists properties for Sellers and represents Buyers, I do not disclose any financing options the Seller isn't offering. Seller Financing is NOT a Lease Purchase (!!!). While the former, Seller Financing, is a financing option, the latter is an actual Contract to Purchase later and may involve a Mortgage, Balloon, OR Seller Financing. I have experience with all the aforementioned forms.


Here, my disclaimer is that I am only posting the different options as understood by me, but not in any legal capacity, naturally.


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## Tango (Aug 19, 2002)

thanks everyone. this has been very informative... i removed the sign a few days ago. prob wil try to remove the "lease to own" sign from the rest and put the rest back up... but not in a big hurry to put it up. i'm pretty sure i just want to sell without any other obligation afterward and it is on realtor.com etc.... so seems like enough.very grateful ya'll :cowboy:


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