We are all wary of making a bad decision when it comes to purchasing a property. It is a huge expense and very big long term responsibility. There are some of us who can have more confidence in our purchase. This is when you are a tenant with an option to buy.
What does this mean? An option to buy is a legally binding document that gives a person, usually a tenant that wants the property they are living in, the right to buy the property within a specified time frame for a specific price. This type of agreement has many advantages for the buyer as it gives the tenant/buyer the opportunity to test drive the property for a few months/years (the purchase time frame will be stipulated in the contract). The person with the option to buy can decide whether or not to exercise that option, and the seller must agree as he is legally bound by the contracts terms.
The fact that you can live in the property before buying it will make your decision to either exercise the option to buy or not alot easier.You can allow your option to buy to expire if you do not wish to purchase the property.If you do that and change your mind the previous agreed upon price will no longer be valid and any price will be negotiated from scratch.
Obviously not all landlords want to sell their property, however with many people struggling to pay their bonds some might be eager to enter into such an agreement.There can be a downside to this kind of agreement though, if the market shifts after you have decided on a price and signed the contract you could end up overpaying /being underpaid for the property.This can be detrimental to both the buyer and the seller.
By the same token it could be a very lucky thing that you have an agreed upon price before a market shift.As a buyer yo
