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I use this Seller’s Acknowledgement to CYA (Cover my Assets).

Anyone can sue anyone anytime.

A disclosure is really important in case there is a lawsuit.

I use this disclosure on all deals:

 

Seller’s Acknowledgements

(Page 1 of 2)

I ,_________________________________________________________ (Seller), on this ____ day of ______________________, 20_____, have agreed in writing to sell the property commonly known as ______________________________________________, (The Property) to ________________________________________ (Buyer) and or assigns, according to the terms and conditions contained in the Purchase and Sale Agreement (The Agreement) of even date, a copy of which is attached hereto. I further state as follows:

________ 1. OWNERSHIP OF THE PROPERTY: I am the owner of The Property (or I have an equitable interest in The Property) and am able to contract for its sale.

________ 2. ACCEPTANCE: I have reviewed the terms and conditions contained in The Agreement and have accepted Buyer’s offer to purchase The Property.

________ 3. GOOD AND VALUABLE CONSIDERATION: I have received good and valuable consideration in signing The Agreement, and I acknowledge both the receipt and the sufficiency of the consideration.

________ 4. IN MY BEST INTEREST: I am satisfied with The Agreement and have agreed to sell The Property because it is in my best interest to do so.

________ 5. FULLY INFORMED AND NOT CONFUSED: I have signed The Agreement being fully informed and with sufficient understanding of all terms and conditions contained therein. I am not confused about any aspect of The Agreement.

________ 6. SATISFIED WITH THE SALES PRICE: I understand I may be selling The Property for less than market value but have chosen to do so because circumstances dictate that an immediate sale, even at a discounted price, is in my best interest. I am satisfied with the sales price I have negotiated.

________ 7. SALE IS FINAL: I understand by signing The Agreement, I have agreed to sell The Property to Buyer and am now bound by the terms and conditions described in The Agreement. I further understand that I cannot “change my mind” or cancel the contract at some later date, nor can I continue to market The Property to any other buyer.

________ 8. CONTINGENCIES MAY EXIST: I understand the sale may be contingent upon Buyer’s inspection and approval of certain items described in The Agreement. I further understand that if Buyer does not approve of these items, Buyer may cancel The Agreement and if cancelled, I must return Buyer’s earnest money in full.

________ 9. NOT A LOAN: I understand The Agreement I have signed is for the outright sale of The Property and is not intended to be a loan of any kind.

________ 10. AGREEMENT MAY BE ASSIGNED: I understand Buyer may assign The Agreement to another party and I may be closing the sale with someone other than Buyer.

________ 11. NO ESCROW: I understand Buyer may choose to “close” this transaction without the use of an escrow company and may record the conveyance documents himself.

Seller’s Acknowledgements

(Page 2 of 2)
________ 12. CLOSING DOCUMENTS: I understand there will be additional closing documents to sign and upon receipt, agree to sign and deliver the closing documents either into Escrow or directly to Buyer, as Buyer may direct, in a timely manner.

________ 13. COPIES OF THE PAPERWORK: I understand that copies of the paperwork I’ve signed will be provided to me in a timely manner and I acknowledge that circumstances dictate that copies may not be immediately made available to me.

________ 14. BUYER ENTITLED TO MAKE A PROFIT: I understand Buyer may resell The Property and may realize a profit in doing so. I agree Buyer is entitled to any profit that may ultimately result from the subsequent resale of The Property.

________ 15. LEGAL COUNSEL ADVISED: I acknowledge Buyer has advised me to seek independent legal counsel to review The Agreement.

________ 16. FINANCIAL REVIEW ADVISED: I acknowledge Buyer has advised me to seek an independent financial advisor to review The Agreement.

________ 17. FAIRLY NEGOTIATED: I understand Buyer has negotiated on his own behalf and likewise, I have negotiated on mine. I acknowledge The Agreement has been negotiated fairly and Buyer has not taken advantage of me or my current situation.

________ 18. NO PRECLUDING AILMENTS: I have no physical, mental or emotional ailments that preclude me from signing The Agreement.

________ 19. NOT UNDER THE INFLUENCE: I am not now under the influence of alcohol or any other mind-altering substance, nor am I taking medication that would cloud my judgment or make me unable to think clearly.

________ 20. NO OTHER PROMISES: I have not been promised anything other than what is described in The Agreement. There are no unresolved issues, no “side agreements,” nor are there other terms not disclosed in The Agreement.

________ 21. NOT UNDER DURESS: I am not under duress and have signed The Agreement of my own free will, without any undue financial pressure. Buyer has in no way pressured me into signing The Agreement.

________ 22. FULLY SATISFIED WITH AGREEMENT: I am fully satisfied with all terms and conditions contained in The Agreement.

________ 23. BUYER IS NOT MY AGENT: I understand that Buyer is a licensed real estate agent in _____your state__________________, but that he is NOT acting as MY agent in any way in this transaction. I am acting in my own best interests and he is acting in his.

Dated this _____ day of ___________________, 20____.

___________________________ Seller (Signature)

___________________________ Seller (Signature)
Brian Gibbons,

www.MyREISkills.com Mentoring

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Name Description
Agreements for Real Estate Agreements for Real Estate – Some are free, some are for our PAYING
STUDENTS. Please email for any help finding agreements.
— Agreements for Land Trusts Trust Agreement – Waranty Deed to Trustee – Beneficiaries Agreement
– Assignment of Beneficial Interest – Letter of Direction to Trustee –
Resignation of Trustee – Notice of Termination of Trustee – Affidavit of
Resignation and Appontment of Successor Trustee – Trustee’s Afidavit
— Agreements for Private Money Financing Joint Venture Agreements – Limited Partnership Agreements –
Partnering Under a Land Trust
— Agreements for Short Saling REOs from Banks Short Sale Disclosure – Quit Claim Deed – Bill Of Sale – Hardship
Letter – Authorization to Release Mortgage Information – Limited Power
of Attorney – Short Sale Letter from Lender (hypothetical) – Cover
Letter to Lender – Counter Offer
— Agreements when Buying or Optioning Property from Selle Using Your State Realtor Agreement – Wholesaling Agreements –
Retailing Agreements – Sub2 Agreements – Seller Held Mortgage Agreements
– Agreement For Deed Agreements – Lease Option When Buying Agreemtments
– Standard Option Agreements – Short Sale Agreements (Pre-Foreclosures,
REOs-Bankers) – Land Trust Agreements
— Agreements when Leasing – Landlording You are the LANDLORD – Agreements when Leasing – Landlording
— Agreements when Selling or Optioning Property to Buyers Assigning Agreements – Double Closing Agreements – Authorization to
Release Loan Application Status – Contractor Agreement – Wrap Around
Mortgage Agreement – Lease Option Selling Agreements – Repair Addendum
Agreement – Standard Non-Exclusive Option Agreement –

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June 22, 2016 — Leave a comment

Field Guide to Lease-Option Purchases

(Updated April 2016)

Lease-option agreements* are common when acquiring personal property—such as dishwashers, washing machines, automobiles, and TVs—but are not as common for the acquisition of real property. Lease-option agreements are generally utilized in residential real estate acquisition when a home buyer would like to purchase a home, but needs to repair her credit rating in order to secure a promissory note and mortgage. The lease-option agreement allows a buyer to lease a property for a set period of time—typically between 1-3 years—with the option to buy the property at a contractual future date. “The negotiated option is typically a percentage of the price for example, one to five percent, and is credited, along with the rents and a rent premium, to the purchase price if the lessee buys the property. If the option to buy is not exercised, the buyer will lose the option fee and rent premium.” (Real Estate Law (link is external), p. 227). Read the articles below to learn more about this alternative real estate financing option. (H. Hester, Information and Digitization Specialist)

*Also known as lease-to-own, rent-to-own, lease/purchase, lease with an option to purchase, or real options.


E – EBSCO articles available for NAR members only. Password can be found on the EBSCO Access Information page.


Lease to Own: The Basics

Is rent-to-own the future of housing? (link is external), (HousingWire, Jan. 14, 2016).

Investors Bank on Rent-to-Own Comeback (REALTOR® Magazine, July 29, 2015).

How do Lease Purchase Agreements Work? (link is external) (SFGate, n.d.).

How Do I Get a List of Rent to Own Homes? (link is external) (realtor.com®, July 25, 2012).

How Do I Find A Rent To Own Home In Bristol, Pennsylvania? (link is external) (realtor.com®, May 10, 2012).

How Do I Find A Realtor To Explain The Rent To Own Option? (link is external) (realtor.com®, Apr. 6, 2012).

Lease-to-Own Contracts (link is external), (UCLA School of Law, 2012).

Lease options are back: proceed carefully (link is external), (Realty Times, Oct. 25, 2011).

Sale-Leaseback Transactions: Price Premiums and Market Efficiency (link is external), (Journal of Real Estate Research, Apr.-June 2010). E

Informal Homeownership in the United States and the Law (link is external), see page 132. (University of Texas School of Law, 2010).

How lease-options benefit sellers, buyers … and their REALTORS®? (link is external), (CRE Online, n.d.).

Thought about lease-to-own transactions?, (REALTOR® Magazine – Speaking of Real Estate blog, Aug. 6, 2009).

Renting to Own (link is external), (realtor.com®, n.d.)

Case Studies & Examples

A Valuation Framework for Rent-to-Own Housing Contracts (link is external), (The Appraisal Journal, Summer 2014). E

Lease-to-own deals offer options in sluggish Tampa Bay housing market (link is external), (St. Petersburg Times, Oct. 23, 2011).

Can I get a lease option with bad credit? (link is external), (realtor.com®, May 5, 2011).

A Growing Housing Imbalance (link is external), (Mortgage Banking, Oct. 2011). E

Raising Capital Through Sale-Leasebacks (link is external), (Public Management, June 2010). E

Tax Implications

Individual Taxation Developments (link is external), (The Tax Adviser, Mar. 2012). E

Comparing Accounting and Taxation for Leases: Certified Public Accountant (link is external), (The CPA Journal, Apr. 2009). E

Tax Considerations for Buying and Selling Property with a Burdensome Lease (link is external), (Journal of Accountancy, 2009). E

Government Publications & Programs

State Agency Lease/Purchase Program (link is external), (Washington State Treasurer’s Office, n.d.).

Recent State Agency Lease/Purchase Interest Rates – Real Estate Only (link is external) (Washington State Treasurer’s Office, n.d.).

Definition from Washington State:

Lease/Purchase Obligations (Real Estate) — Lease/purchase obligations are contracts entered into by the state which provide for the use and purchase of real or personal property, and provide for payment by the state over a term of more than one year. For reference, see RCW chapter 39.94 “Financing Contracts.” Lease/purchase obligations are one type of lease-development alternative.” (Financial Budget Instructions Glossary of Terms (link is external), Washington State Office of Financial Management, n.d.).

Non-Mortgage Alternatives to RE Financing (link is external) from Reference Book – A Real Estate Guide (link is external), (California Department of Real Estate, 2010).

LFC Hearing Brief (link is external), (New Mexico Legislative Finance Committee, Dec. 2007).

Instructions for the Lease/Purchase Analysis Modeling Tool (link is external), (Idaho State Leasing Dept. of Administration, n.d.).

eBooks & Other Resources

The following eBooks and digital audiobooks are available to NAR members:

eBooks.realtor.org

Smart Guide to Real Estate: Step by Step Rent to Own, (Kindle and ePub)

Investing in Rent-to-Own Property, 2010 (ePub)

Investing in Real Estate With Lease Options and “Subject to” Deals, 2005 (ePub)

Books, Videos, Research Reports & More

The resources below are available for loan through Information Services. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Services at 800-874-6500 for assistance.

Who Says You Can’t Buy a Home! (link is external) HG 2040.5 R25w (2006).

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Sale-Leasebacks & Synthetic Leases

Seller Financing

Information Services Blog

Have an Idea for a New Field Guide?

Send us your suggestions (link sends e-mail).

The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.

Seller Financing and Lease Options It is all about the TERMS of the Deal – If you can not get the PRICE low, get great TERMS – Good with little equity or sellers who can wait for their cash – Exit Strategy is either Sell It or Keep It – Create No Qualifying Financing for YOURSELF or YOUR NEW BUYER.