Everyone seems to be talking about how difficult it is to find a home these days because buyers are out bidding each other so they can get their offer accepted. Many buyers know that the house they end up buying may not appraise for what they end up paying for the home. That is why many home buyers are going the lease purchase route where they get an investor to pay cash for their home and then rent it back from the investor. If in a couple of years they determine that their locked in sale price is a good fair market value, then they have the option to buy their home from their investor knowing the home will most likely appraise.
The reason more and more buyers are deciding that they want to do a lease purchase contract rather than a sales contract is because they will not have to worry about their mortgage being under water in a couple of years. In the years between 2007 and 2010 many home owners had to sell their homes at a loss or through foreclosure. Some even had to agree to a short sale where their mortgage lender took the loss and the seller ending up with bad credit and no equity.
Going the lease purchase home buying way takes the worry out of trying to predict if the real estate market will be good or bad in the future. If the Real Estate market is strong then the lease purchase buyer will close on their home. If the real estate market is weak then it may be a good idea not to continue renting their lease purchase home because there are good deals to be found.