We’ve already talked about both Owner Financing and Lease Purchase individually. Now it’s time to compare these two Terms options so that you will have a better idea which of them would suit your needs best. It’s important to have all the information on hand so you can sell your home the way you want and for the best price.

The Similarities

Before talking about their differences, let’s first talk about the traits that both Lease Purchase and Owner Financing share. So here they are:

• Allow for quick sale of the home
• Include down payment/option deposit, regular payments and eventually, full payment
• No need to involve banks
• Process is very simple
• Home can be sold for close to or actual market value 

With either option, deals can be closed in under a week. Depending on the agreement, there could be a substantial down payment or option deposit, monthly payments and once the buyer has been approved for a loan, the full amount can be settled. There is no need to involve banks either since the seller acts as the bank. This makes the process much simpler than if you were to have your home put up on a listing.

Finally, the home can be sold for close to or at actual market value. With listings, this is not guaranteed since homes lose value the longer they remain unsold. With Lease Purchase or Owner Financing, sellers can sell their homes much faster with more potential buyers and at top prices.

Their Differences

Lease Purchase and Owner Financing are different in one major way: transference of ownership. With Owner Financing, you let go of ownership of the home once the agreement is signed. With Lease Purchase, you retain ownership of your home until the full amount is paid. On that note, there are a few other considerations regarding the two options that will need to be discussed before making your decision.

When trying to choose between Owner Financing and Lease Purchase for example, look at the down payment or option deposit aspects. Typically, you can expect Lease Purchase to come with a smaller deposit. With Owner Financing, the down payment can go up to 20 percent of the home’s value in certain cases.

The seller also won’t be without protection when agreeing to transfer ownership of the house with Owner Financing. Acting as the bank gives the seller all the security and documentation that bank transactions get, including a note and a recorded mortgage.

This means that, in the extremely unlikely event that the buyer fails to make their payments, you can essentially move for a foreclosure of the home and reassume ownership. Based on our experience though, buyers who are willing to provide substantial, non-refundable down payments rarely ever default. It almost never happens.

If and when it does happen though, you won’t have to worry about doing all the work yourself since we will also provide you with assistance when you move to foreclose, including helping you with paper work and such. If you decide to sell the house again and get yet another substantial, non-refundable down payment, we will still be here to help. In any event, you are protected.

Likewise, the matter of retaining ownership could cause some concern with Lease Purchase. There’s also the fact that the down payment/option deposit and regular payments for Lease Purchase are typically lower compared to Owner Financing. However, these are minor issues when you consider the advantages such as:

• Getting paid for something you still own
• Earning money from the home without needing to manage it
• Not having to worry about repairs since the buyer will take care of that
• Retaining the tax benefits
• Getting debt relief if there is any
• Ensuring that the home is actually sold before letting it go

So there you have it, the differences between Lease Purchase and Owner Financing. Once you have made your decision, you can contact us to talk about your choice and sell your home for top dollar. Feel free to ask any questions you have regarding this topic.