Peter Mohylsky (PMI. Destin)

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Eve Alexander
Buyers Broker of Florida - Tampa, FL
Exclusively Representing ONLY Tampa Home Buyers

If the mortgage has a "due on sale" clause, which most mortages do...I would not touch that one with a 10 ft pole.

At best, I would advise the buyer to discuss with an attorney and wash my hands of that part.

In the old days....If no "due on sale" I would write up a purchase agreeement and a lease and tie the two together. Today, I think I would just have an attorney do it. 


Aug 13, 2018 03:32 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I would always, always, always have an attorney draft a lease-purchase agreement, Peter!

Don't shoulder that liability - it's most definitely worth the cost of an attorney drafting it.

Aug 13, 2018 04:18 PM
John Juarez
The Medford Real Estate Team - Fremont, CA

I am not in favor of such a transaction. Never done one and have actively avoided the opportunity once or twice.

Do an internet search for "lease to purchase pro con" and you will get all of the informtion you can digest.

Aug 13, 2018 04:00 PM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

I don't.  In fact in over twenty years in this business I have never been involved in a lease-option transaction.  Commonly asked question but quite uncommon here.


Aug 13, 2018 03:46 PM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I have avoided these types of contracts or anything that has added complications. It's kept me out of trouble.

Aug 13, 2018 03:31 PM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Peter, they never close. That's a big problem right there. Why do the buyers need to lease first?

Aug 13, 2018 04:42 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I do not. That is a rabbit hole I've never gone down.  And I echo what Mike & Eve Alexander said ... I would not touch it if asked ... they would be directed to an attorney to deal with it. 

Aug 13, 2018 04:05 PM
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL

Great answers. 

Aug 13, 2018 09:10 PM
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Never done it. 

Aug 13, 2018 09:07 PM
Ryan Huggins - Thousand Oaks, CA - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Sorry, they are very seldom done in CA.  I've never seen one.

Aug 13, 2018 04:18 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

sorry, in 40 years, I never did one of those...

Aug 13, 2018 04:16 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Your best path is to have an attorney draft the agreement. I have never been a fan!

Aug 13, 2018 04:02 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Have yet to see a lease purchase ever turn into a purchase and the last one I "saw" after the fact, my clients had $30K of damages to their home and didn't recover but less than half. Make sure you have a big, big non-refundable deposit which comes back to the tenants/buyers only if they purchase. And make sure agreements are drafted by an attorney if you move forward. 

Aug 14, 2018 04:42 AM
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Sorry Peter Mohylsky I avoid these like the plague!

Aug 13, 2018 05:18 PM
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

Owner wants to sell? The person wanting to lease with option to purchase should apply for a mortgage with the lender of sellers choice to start with. That way you find out up front if they will ever be able to complete the purchase.

Aug 13, 2018 05:15 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy


Check with a real estate attorney on this one.  A

Aug 13, 2018 03:32 PM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Great question Peter Mohylsky !


Was just reviewing one for AZ.


Check out this link:


You can choose your own state and export a PDF for free... 

Aug 15, 2018 06:59 AM
Dan Tabit
Keller Williams Bellevue - Sammamish, WA

They can be a gold mine for the landlord/seller without a conscience and a crime for the renter/buyer. The buyer "just needs time to fix their credit", but never does. The purchase option comes up, little if any is applied to the down payment and they still don't qualify to purchase, so they either move on or just stay tenants losing what they thought they were putting into the home.  

Unless they are done by close friends or family they just aren't worth it. 

Aug 13, 2018 09:11 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

No experience here but have heard plenty about the risks

Aug 13, 2018 08:33 PM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

In ancient times we did this & contracts & ideas have changed. No I really couldn't help. I would honestly talk the buyer out of it - it's slanted toward the owner.

Aug 13, 2018 05:16 PM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I like to make sure the buyer can actually get a mortgage, BUT JUST needs to save money for down payment and or closing costs. I MAKE them put down a non refundable deposit towards tdhe purchase. I negotiate the lease, then the purchase terms on separate contracts. If they dont buy, deposit is lost and must state they have to be out on XXX date or pay XXX additional. 

Aug 13, 2018 05:04 PM
Roy Kelley
Retired - Gaithersburg, MD

Start with a contract.

Aug 13, 2018 04:42 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

They don't work in our market - either purchase, or rent.

Aug 16, 2018 06:29 PM
Michael Thacker - Re/Max Real Estate Center - Louisville
Re/Max Real Estate Center - The Thacker Group - Louisville, KY
Your best friend who just happens to be a Realtor

Cover pets of course, and cover if the tenant should decide NOT to buy, when and how the showings process will go. You want to cover it before, and make sure you cover making sure the tenant has the home "show" ready when they are nearing the end of the lease. 

Aug 16, 2018 02:33 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Peter Mohylsky the best person to help 'us' with this kind of situation is... .

you guessed it right - the attorney.

Aug 14, 2018 08:31 PM
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

I wouldn't get involved as only one party will be happy at the end of the lease and the chance of being sued is high.

Aug 14, 2018 11:51 AM
Harjeet Bhatti
Home Mortgage Consultant 25 States

A purchase agreement evidencing a minimum original term of at least 12 month clearly stating the monthly rental amount and specifying the terms of the lease. 

Aug 14, 2018 08:51 AM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

The terminology differs but you're talking about a "Rent to Own" correct? It all sounds great until the tenant / purchaser finally understands their rent is inflated along with the "agreed" future sale price. Now they're pissed off and it'll take some doing to get them out (legally) before the extra cash flow dries up.

Aug 14, 2018 07:12 AM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

I bought my first house that way in 1989. Unfortunately, that was also the last time I've done one. Memory serves:

Define Payment Breakdown

Rent Amount

Principle/Interest Amount

Balloon Payment schedule.

Final Buyout Deadline.

Seller Financing?

Terms of lease & terms of contract separated.

Aug 14, 2018 07:10 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I use an attorney to help me with these.

Aug 14, 2018 06:06 AM
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

This form of financing has become incredibly perilous due to the Consumer Protection Act.  Transactions that involve a occupant buyer places the seller/owner in extreme peril IF the contract creates any control interest in the real estate for the buyer/occupant.

I would advise investors/owners to stay away from any form of financing a occupant buyer.  Should that advise be ignored then make certain the lease and purchase are completely separate, in essence, creating no control interest in the property for the buyer. Otherwise, the knowledgeable buyer will be able to bankrupt the owner. That is the outcome of protecting the consumer for the past criminality of Bank of America.

Aug 14, 2018 05:27 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

In Texas we are not allowed to write any lease to purchase language.  Need to get an attorney involved.

Aug 14, 2018 04:53 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Our Association drafted one for us

Aug 13, 2018 08:53 PM
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

I have never seen what I would call a good lease to buy contract

Aug 13, 2018 07:18 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Get a very good RE attny.

Aug 13, 2018 05:42 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 Hi, Peter.  

       Absolutely use an attorney.  

       There may be two separate documents... the lease or lease option, and the contract for sale and purchase. 

       And of course, that existing mortgage has to be considered... you don't want to trigger a due on sale clause.


Aug 13, 2018 05:22 PM