Facebook shares sink 11 percent as reality overtakes hype(Reuters) - Facebook shares sank 11 percent in the first day of trading without the full support of the company's underwriters, leaving some investors down almost 25 percent from where they were Friday … More »Facebook shares sink 11 percent as reality overtakes hype
(Reuters) - Facebook shares sank 11 percent in the first day of trading without the full support of the company's underwriters, leaving some investors down almost 25 percent from where they were Friday and driving others to switch back to more established stocks. Facebook's debut was beset by problems, so much so that Nasdaq …
Yahoo clears a hurdle, sells Alibaba stake for $7.1 billionSHANGHAI/NEW YORK (Reuters) - Yahoo Inc will sell as much as half of its 40 percent stake in Chinese e-commerce powerhouse Alibaba Group for $7.1 billion, ending years of fractious talks over how to extract … More »Yahoo clears a hurdle, sells Alibaba stake for $7.1 billion
SHANGHAI/NEW YORK (Reuters) - Yahoo Inc will sell as much as half of its 40 percent stake in Chinese e-commerce powerhouse Alibaba Group for $7.1 billion, ending years of fractious talks over how to extract value from its most prized asset. Yahoo also increased its stock buyback authorization by $5 billion to $5.5 billion …
Wall Street rebounds, but investors dump FacebookNEW YORK (Reuters) - Stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak in a rebound from equities' biggest weekly drop in almost six months, but Facebook slumped … More »Wall Street rebounds, but investors dump Facebook
NEW YORK (Reuters) - Stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak in a rebound from equities' biggest weekly drop in almost six months, but Facebook slumped in its second session after a disappointing debut. Tech shares were among the day's biggest gainers, with an S&P sector …
Apple still dominates world's top brands: study(Reuters) - Apple has maintained its place as the world's most valuable brand over the past year, leading a group of technology-related companies that dominate the top 10, according to a study published … More »Apple still dominates world's top brands: study
(Reuters) - Apple has maintained its place as the world's most valuable brand over the past year, leading a group of technology-related companies that dominate the top 10, according to a study published on Tuesday. The iPhone and iPad maker has boosted its brand value by 19 percent in the past year to $183 billion, or 37 …
Exclusive: U.S. lets China bypass Wall Street for Treasury ordersNEW YORK (Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, … More »Exclusive: U.S. lets China bypass Wall Street for Treasury orders
NEW YORK (Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters. The relationship means the People's Bank of China buys U.S. debt using …
Silicon Valley takes Facebook fizzle in strideSAN FRANCISCO (Reuters) - Facebook's lackluster initial public offering performance is a black eye for many on Wall Street and could have ramifications for similar upcoming deals such as an offering by … More »Silicon Valley takes Facebook fizzle in stride
SAN FRANCISCO (Reuters) - Facebook's lackluster initial public offering performance is a black eye for many on Wall Street and could have ramifications for similar upcoming deals such as an offering by Twitter, but venture capitalists in Silicon Valley are keen to shrug off Facebook's stumble - at least for now. ...
Flurry of arguments start Gupta insider-trading trialNEW YORK (Reuters) - Former Goldman Sachs director Rajat Gupta "threw away his duties" by divulging bank secrets to hedge fund manager Raj Rajaratnam, a U.S. prosecutor said at the start of Gupta's insider-trading … More »Flurry of arguments start Gupta insider-trading trial
NEW YORK (Reuters) - Former Goldman Sachs director Rajat Gupta "threw away his duties" by divulging bank secrets to hedge fund manager Raj Rajaratnam, a U.S. prosecutor said at the start of Gupta's insider-trading trial on Monday. The defense punched back that the government had no direct evidence. Gupta, 63, once a boldface …
U.S. lawmakers frustrated in Wal-Mart corruption probeWASHINGTON (Reuters) - U.S. lawmakers investigating Wal-Mart Stores Inc for alleged bribery in Mexico are frustrated by the lack of cooperation they have received from the company, a committee staffer … More »U.S. lawmakers frustrated in Wal-Mart corruption probe
WASHINGTON (Reuters) - U.S. lawmakers investigating Wal-Mart Stores Inc for alleged bribery in Mexico are frustrated by the lack of cooperation they have received from the company, a committee staffer familiar with the investigation said. Attorneys for Wal-Mart briefed the committee earlier on Monday about the company's …
Insight: Morgan Stanley cut Facebook estimates just before IPO(Reuters) - In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, … More »Insight: Morgan Stanley cut Facebook estimates just before IPO
(Reuters) - In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company. The sudden caution very close to the huge initial …
- Some investors still await confirmation on Facebook orders
NEW YORK (Reuters) - Some customers of Fidelity Investments, Morgan Stanley and Charles Schwab are still waiting to see if their trades for Facebook shares were completed on Friday. Massive demand for … More »Some investors still await confirmation on Facebook orders
NEW YORK (Reuters) - Some customers of Fidelity Investments, Morgan Stanley and Charles Schwab are still waiting to see if their trades for Facebook shares were completed on Friday. Massive demand for the social networking giant's initial public offering on Friday, which set a trading volume record for U.S. market debuts, …
- Facebook stock slide puts new pressures on company
SAN FRANCISCO (Reuters) - Facebook Inc's underwhelming debut on Wall Street increases the pressure on the social networking giant to deliver stellar growth - a novel situation for Chief Executive Mark … More »Facebook stock slide puts new pressures on company
SAN FRANCISCO (Reuters) - Facebook Inc's underwhelming debut on Wall Street increases the pressure on the social networking giant to deliver stellar growth - a novel situation for Chief Executive Mark Zuckerberg, who has been clear he is more interested in building products than making money. Facebook shares fell 11 percent …
- Eaton to buy Cooper Industries for $11.8 billion
(Reuters) - Diversified industrial manufacturer Eaton Corp struck a deal to buy electrical equipment maker Cooper Industries Plc for $11.8 billion in cash and stock and said it would shift its incorporation … More »Eaton to buy Cooper Industries for $11.8 billion
(Reuters) - Diversified industrial manufacturer Eaton Corp struck a deal to buy electrical equipment maker Cooper Industries Plc for $11.8 billion in cash and stock and said it would shift its incorporation to Ireland to save on taxes. The deal, Eaton's biggest ever, will allow the company to offer a broader range of electrical …
- Nasdaq announces plan for unfilled Facebook orders
NEW YORK (Reuters) - Nasdaq has engaged federal regulators to untangle the problems that occurred at the opening of Facebook Inc's initial public offering on Friday that could eventually result in financial … More »Nasdaq announces plan for unfilled Facebook orders
NEW YORK (Reuters) - Nasdaq has engaged federal regulators to untangle the problems that occurred at the opening of Facebook Inc's initial public offering on Friday that could eventually result in financial restitution for investors who did not get shares at the desired price. The Financial Industry Regulatory Authority …
- Early Facebook mutual fund buyers still in money
(Reuters) - Fidelity Investments and other big mutual fund families that were early backers of Facebook Inc are likely still winners despite the social network's troubled stock market debut. Facebook shares … More »Early Facebook mutual fund buyers still in money
(Reuters) - Fidelity Investments and other big mutual fund families that were early backers of Facebook Inc are likely still winners despite the social network's troubled stock market debut. Facebook shares were priced at $38 per share in its initial public offering on Thursday. Despite an initial bump in their market debut …
Barclays to sell $6.1 billion BlackRock stakeLONDON (Reuters) - British bank Barclays is selling its near-20 percent stake in U.S. asset manager BlackRock, worth $6.1 billion, as tougher global regulations have cut the attraction of such holdings. … More »Barclays to sell $6.1 billion BlackRock stake
LONDON (Reuters) - British bank Barclays is selling its near-20 percent stake in U.S. asset manager BlackRock, worth $6.1 billion, as tougher global regulations have cut the attraction of such holdings. Barclays has held the stake for almost three years, a legacy of BlackRock's $15 billion purchase of Barclays Global Investors, …
Question
What are the typical provisions of a lease/option agreement? i.e. Down Payment, Rent, etc.?
I am currently renting and a home across the street has recently become available for sale by owner. I have recently applied for a mortgage but my approval requires me to complete several items that may take a few months.I approached the owner with the possibility of a lease/option agreement so I may move into the home and leave the rental property. The owner mentioned today an option "fee" of $7,500 and monthly rent of $1,500 with a final purchase price of $173,900. Does the option fee typically get applied to the purchase price when I complete the sale? Should I request a percentage of my rent to be applied to the final purchase price as well? I haven't received any of the paperwork yet but just wanted some ideas. I am new to this.
5 years ago - 6 answersBest Answer
Here is how I work it. The tenant pays me $5,000 cash upon moving in. Whatever rent is, $100 each month is potentially added to the $5,000. After 3 years the tenant would have a credit of $5,000 plus $3,600 for a total of $8,600 to use as a down payment for a mortgage at the initially agreed-upon price. If the tenant gets a mortgage, great, they own the house. If the tenant can't get a mortgage within 3 years, they lose their initial $5,000 and the $3,600 credit from the rent. They lose it all.
So to answer your questions. Yes, the option fee gets applied toward the purchase price. It will be your down payment. Yes, you should request that a percentage of the rent be added to the purchase price.
You would be crazy not to insist that the option fee and rent percentage be applied to the purchase price. If the seller doesn't want to do that, WALK AWAY!
Source(s):
Landlord. Investor.
5 years agoOther Answers
Traditionally, the OPTION money is applied to the purchase of the home. It depends on the wording of the contract you sign with the owner.
Be sure you want the house before you sign the contract, because if you decide not to buy, the owner KEEPS your $7,500 and you walk away with nothing.
Make sure that the contract stipulates that the option money will be applied to the purchase price in the even that you opt to purchase the house.
It is NOT usual to apply a percent of the rent to the purchase price. The rent usually has nothing to do with the purchase.
The option fee should be applied to the final sale. You and the seller should come to an agreement on what amount of your monthly rent will be applied to the final purchase price. Some of it should. However, take into consideration that he has expenses on the property as well. You will also need to agree on maintenance issues and what happens if you back out of the agreement. Be realistic, but also realize that everything is negotiable. I would try for 50% of the rent to be applied to the final sales price, but settle for something less, probably. Get EVERYTHING in writing and have a legal person look at all contracts.
by Dragonlady - 5 years agoThere's not much in the way of "typical numbers" for a lease/option.
Usually though, the rent is fairly close to the owner's current payment, rounded up. The "deposit" is broken down into two parts, BOTH of which are usually applied to closing, but one is considered a rent deposit until then, and the other part is a nonrefundable option fee if the deal never closes.
Sometimes part of the "rent" is applied to the purchase price, sometimes it isn't.
Be sure you know whether it is a true option, or merely a "first right of refusal". The difference is what happens if someone else wants to buy the house during the option period. If you accept a first right of refusal, the option fee should be refundable if you decline.
To answer your specific questions, the option fee should apply to the purchase price when you close. Be sure you understand what part is nonrefundable if you do not. You should ask that part of that 7500 be rental deposit, and hence refundable.
You should definitely ask for part of the rent to go toward closing, but expect resistance. The amount of each payment that currently goes to principal is "fair", but don't expect to get it. Put yourself in their shoes, and you'll understand that they are taking the risk that the market will skyrocket, leaving them locked into today's price, and also the risk that the bottom will fall out, in which case you won't buy.
If you REALLY want the house - then consider a land contract. Typically a land contract you put about 10% down and make your payments... usually take the asking price - minus the down payment for the house and add interest of anywhere from 8-11% (
you can do a mortgage calculator find one on line) the interest should be deductible on your personal tax return - as well depending on your income bracket your rent could be too....
You may be responsible for the taxes and insurance, typically depending on your agreement you finance the house in a couple of years yourself and it is legally yours...
When you do this, normally the principle made to the owner each month is deducted from the sale price and you only finance the balance....
Depending on the market it may be a good or bad idea to lock yourself into the price - just be careful with all the housing problems most states are experiencing, you do not want to pay too much....
Best advice I could give you is definately have an attorney read over anything but a lease before you sign... make sure he knows what you want and then you will be happy with your decision..
Good Luck, buying a home is always exciting and nerve wracking.....
Source(s)
Home owner, landlord and prior land contract deals...
by prbylisa - 5 years agoI COMPLETELY agree with Clifford G
by glitter4u2004 - 5 years ago
