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Short Sale Lease Option
I was looking at a place today and the realtor showing the place mentions something about a term I never heard before. I just smiled and nodded because I didn't want to look stupid, but now I come to you and ask: Can anyone tell me what is a short sale lease option? I know what the words mean on their own, but even when I look it up I don't understand what the real estate sites are talking about!
Can anyone help me?
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This is actually pretty simple stuff. The current owner of the place owes more to the bank than what it's worth. He (or she) has worked out a deal with the bank to sell the place for less than what's owed. (This is a short sale.) The lease option is where you come in. If you want to buy the house but can't manage the loan right now, you can make a deal with the owner. The owner agrees to sell the house to you and you only, in exchange for some money (an option deposit). You pay rent on the house; part of your rent gets set aside as part of the down payment. Once you can manage to get the mortgage, you buy the house. If you decide not to buy the house, you lose the option deposit and the money you had paid toward the deposit.
Hope this helps.
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