My wife and I decided that our first home purchase should be a beautiful, old (circa 1902) brick home in the city of Cincinnati. We learned very quickly that buying a 106-year-old home had its drawbacks. The first time I had to unclog the shower drain, I realized the hair I pulled out could have belonged to President William Howard Taft, but the antique dealer said it was gross and unlikely.
Now that our family is growing, we have considered moving into a larger, newer home. The question that remains is what to do with our current home? It turns out that there are a few options when buying and selling Real Estate in Ohio.
The first step is obvious. Find people who don’t mind that the main staircase is so creaky that when I go for a late night glass of water, it wakes my whole family and the neighbor’s dog. I’ve considered installing a rope-swing to avoid this problem, but was advised that it may hurt my home’s resale value. Agree to disagree.
The next important step is choosing the type of Real Estate transaction. The options are a Purchase Agreement, a Land Installment Contract, or a Lease with an Option to Purchase.
The Purchase Agreement is the most common way to buy or sell Real Estate. A purchaser makes an offer and the seller either accepts or counter-offers. When I bought my house this way, I made a counter-offer with the stipulation that the seller should fix the creaky stairs. They said no.
While a Land-Installment Contract sounds like something that people fought over in the Wild West, in reality it is a contract that allows the purchaser to pay the seller the purchase price over an extended period of time. The length of time and purchase price are agreed upon by both parties involved. For example, when Michael Jordan put his mansion up for sale, I proposed a Land-Installment Contract where I would pay him $1 per year for 29 million years. I have yet to hear back from MJ.
Lastly, a Lease with an Option to Purchase gives a tenant the option to purchase the Real Estate at any time during the agreement. In the meantime, the rent payments do not count toward the purchase price. In other words, you could pay me $1,000 a month for five years to lease my house, creaky stairs and all. At any time during those five years, if you decide you really love how cold the house gets in winter because of its original windows, you could purchase my house for $150,000.
With all of its flaws, our little house really is beautiful and I am sure someone will find it perfect as we once did. In the meantime, I am going to see if Michael Jordan just wants a straight-up trade.
Elliott Stapleton Attorney with CMRS Law