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Lease Purchase (Rent-to-Own)

If you're interested in buying a home, but you don't currently qualify for a loan because of lack of savings or credit history, you might consider learning about our rent-to-own or lease purchase process.

The Basics: How it works

Today, lease purchase agreements are an alternative financing vehicle. The variances are state specific and not all states have identical laws. Before entering into an agreement with a buyer, sellers should obtain the advice of a real estate lawyer. The information below is an overview and generally Arizona State specific.  None of the following should be construed as legal or financial advice.

Basics of a Lease Purchase

The aim of our process is to qualify you for a mortgage and is based on a ‘lease purchase’. This will be similar to a “regular” home purchase, but with a later closing date, and we can typically help those who can qualify for a mortgage in 12-15 months*.

[*Note to qualify for a mortgage, a Chapter 7 bankruptcy requires 2 years from the discharge date; a ‘short sale’ or ‘foreclosure’ 3 years from the date of those occurrences.]

There will be a purchase contract, a small down payment and a small monthly rent premium (in addition to the regular rent) - this down payment and rent premium will ensure you will have the full mortgage down payment at the end of the lease term. The contract, down payment and rental premium all go into escrow.


To begin the process we have a mortgage lender establish the period of time needed to qualify for a loan, and for what amount - this will give us the basis for writing your ‘lease purchase’. The Loan Officer and her credit department will support you with credit repair, counseling and advice throughout the process.

Buyer pays the seller a down payment on the ‘lease purchase’ contract. This down payment may be substantial, though not as much as needed for a mortgage.

Buyer and seller agree on a purchase price, usually based on the present listing price.

During the term of the ‘lease purchase’ contract, the buyer agrees to a predetermined rental amount.

The ‘lease purchase’ down payment money and also a portion of the monthly lease payment typically applies toward the purchase price, and these sums are held in Escrow 

Nobody else can buy the property unless the buyer defaults.

The buyer typically cannot assign the lease purchase agreement without seller approval.

Buyers are usually responsible for maintaining the property. Sellers typically carry a “home warranty” during the period of the lease and continue paying expenses such as taxes, insurance and HOA fees.

The buyer is contractually obligated to buy the property. In the event the buyer defaults on the purchase the monies in escrow will be forfeited.

The parties may agree to an amount of the initial down payment being paid to their respective real estate agents as partial payment of commissions. The seller is responsible for this money.

Doing a Lease Purchase

Licensed real estate agents in the State of Arizona are authorized to write real estate contracts, and can therefore take you through the ‘Lease Purchase’ process.

You should consult with a real estate lawyer about the documents, and to explain your rights, including those of possession and default consequences - agents are not lawyers, and cannot and should not give legal advice.

Lease Purchase Benefits

  • Sellers generally get market value at today's prices and relief from paying a mortgage on a vacant property.
  • Although the lease payments may exceed market rent, the buyer is building a down payment.
  • A lease purchase offers an attractive way to ease into the benefits of homeownership, when lack of savings or credit history would otherwise prevent this.
  • Buyers enter into a “forced savings” plan since part of the lease payment is credited toward the purchase price at the end of the ‘lease purchase’ agreement.

If the buyer defaults, sellers do not refund any portion of the lease payments nor the down payment money and may retain the right to sue for specific performance. 

Contact us to learn more about our Rent to Own process or view a selection of our available properties now.

We have access to all the available homes in your area to match your housing needs.

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Serving Tucson, Sahuarita, Oro Valley, Marana, Vail, Sierra Vista, Phoenix and other areas in Southern Arizona
Note: We are NOT affiliated with Advantage Rent to Own, LLC!!