Am I doing a "Lease to own option" correctly?

[Frank S.]

I have a long tenure tenant in my SFR. We made a verbal agreement a year ago: he gives me 55k down and I sell him the house in one year. The agreed price is 170k minus his 55k down payment. He just got pre-approved by a lender what are my next step to close the sale? I think I need to confirm the pre-approval, agree on a closing date, contact a title company, and have the title company facilitate the rest of the deal. I am worried I am missing something. This is my first time doing this time of sale. Any advice or tips would be greatly appreciated. Also let me know if you need more info.

[Christopher Phillips]

@Frank S.

Yes. You're missing a lot of stuff.

The lease option should have been in writing. Prices might have changed in one year. options are usually done with non-refundable option payments, not down payments.

Did you put the down payment in escrow?

Sales need to be in a purchase agreement and signed by both parties.

I'm assuming the buyer's lender will order the appraisal. What are the comps looking like right now?

Texas requires a property condition disclosure from the seller.

Buyer needs to order a title search. You should consider title insurance.

Texas doesn't require that a lawyer be involved, but you might want to consider it.