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The financial crisis has created a massive negative impact on the world market. It has shown a significant consequence on the real estate market also where higher number sellers or homeowners are using creative financing to sell their property. The sellers are facing a great difficulty to get prospective buyers for their projects. The buyers are also going through difficult conditions as they are inefficient to get the satisfactory financing plan to purchase that property. To help both the parties, there are effective agreements available in market. Hence, the single alternative that remains with the sellers or home owners is to sell their property by following effective financing plans that is beneficial for both the parties.

One such financing solution is Lease Purchase Agreement. In this kind of contract, the property holder can rent the property to the client till the ending date. Lease Purchase contract is made between the seller and the buyer where the prospective buyer is a genuine customer and will surely purchase the property till the closing. However, the client is not quickly prepared to buy the property and is capable to close. The highest term is twelve to twenty-four months which is negotiable.

However in this agreement the buyer is required to pay the purchase deposit which is credited in the buyers down payment. But it is a non-refundable deposit in case if the buyer fails to make the payments in future. The purchase deposit is 3% of the purchase price, and is regarded quite reasonable for the client. The amount of purchase deposit is also negotiable. This amount can be significantly high or low, and this is quite normal.

The purchase price of the property is fixed between both the parties to contract well in advance. Although the property holder relies on the buyer to pay in cash or loan so that the deal is over before the deadline mutually agreed by both parties to contract. As per the rules the purchase price increases if the contract is extended.

The Lease Purchase Agreement is helpful for both, the property holder as well as the client. Buyers' are quite satisfied as they get enough time to save a large sum for down payment as well as it helps them to clear the past dues or may be he gets enough time to sell his old property thereby helping him make money for new purchase. A part of the buyer's per month rental payment is credited in the purchase price, this is known as "forced monthly saving plan". This credit amount is negotiable though. The homeowners are benefited as they attain the best price for their property that is presently available. This happens as the contract allows the buyer to close as per his convenience. The per month rental payments may also extend and the client is required to bear all the maintenance costs and repairs of the property, as he is the holder of the property in the future. The buyer does not have to pay any mortgage loan against the vacant property.