Posted by scarolan on April 16, 2005 at 07:04:34:
From what I understand, if you have not lived in the home 2 of the last 5 years then you do pay a capital gains tax.
My particular prepayment penalty is on a second mortgage, which lasts for three years. I should have clarified that point - after this lease option is over (12 months) I will be outside the 3 year window.
Anyone have suggestions or answers to my original questions?
Lease Option My House - Posted by scarolan
Posted by scarolan on April 15, 2005 at 10:49:11:
Greetings friends:
I’m planning to move out of my house into something smaller, and sell it via a lease option. Here are a couple of questions that maybe you can help me with:
Option fee - I have seen some contracts that apply this towards the down payment, and some that apply it toward the purchase price. What is the best way to handle this?
Rent discounts - How would you apply a rent discount to someone’s option fee? I suppose I could do something like reduce the option fee by X, and offer a monthly discount of X/12 for rent paid on time? How do you all do this?
Separate contracts - I have one contract for the option, and the other as a standard rental agreement. Should I tack on a security deposit in addition to the option fee? What would be the reason or circumstance where you’d do this?
Terms - how long should the option last? I’m thinking about 12 months. After 12 mos, I’m free of any prepayment penalties or capital gains tax on the sale of the home.
Any other snafus or red flags you can warn me about ahead of time when doing a lease option?
Thanks
Sean
Re: Lease Option My House - Posted by sandie
Posted by sandie on April 15, 2005 at 21:38:13:
Scarolan or if someone knows could answer,
If you sell a home on a lease option, you do not have to pay prepayment penalties or capital gain taxes,
is that correct? What are the rules?
Thank You,
Sandie