RentToOwn-HouseFinder.com
has anyone here have done a lease to own contract to purchase a house?
hi there me and my husband have been trying to purchase a house but dont have great credit, so we decided to do a lease to purchase on a single family, we have never done this before so we wanted to see if anyone has done this type of deal and how was your experience, and also what kind of down payment did you put down and also how long did you rent it for. thankyou for your time
Public Comments
- Everything in real estate is negotiable and since rent-to-own is not a standard practice, it is more so than most. When you negotiate you want the longest possible rental period, lowest price and the highest credit towards the purchase price. It seems a deposit in the 2 to 5% range is usually required. Also you will probably have to save some money for a downpayment in addition to the credit you receive from the seller, because lenders will only look at the amount that you paid above the market rate for credit towards a downpayment. Ideally you would have a timeframe that allows you to save up a 10% downpayment.
- This is a question that varies from sale to sale. You enter into a contract with the seller who sets how much you will put down, how much you will pay, what the interest rate will be, and how long you will pay. If you decide to do this, have a lawyer look the contract over for you, and make sure a Memorandum of Interest is filed in the courthouse where the property is located. That way, it will be in the records that you are buying and the seller can't do anything with the land (Like sell it or mortgage it) without dealing with you. Good Luck.
- I have never needed to do one of these, but they are not uncommon. However, the dealing is complex; you have to negotiate the terms of the purchase, the purchase option, and the lease, and deal with a very long list of what-ifs. If you aren't thoroughly familiar with deals of this sort, use a broker to help.
- I did this some time back. My lease to purchase didn't go through because the owner went nut-so and tried to sell it out from under me. Here's what you need to look for in a contract. 1. Established price for the house now... not market value at the end of the lease. 2. Establish the monthly lease amount THEN establish the down payment amount. If the home normally leases for $1,000 a month.. then that is the amount you should pay. 3. Establish a 'trust account' in which you will deposit money on a monthly basis that will be used for the down payment. So... let's say you lease the home for $1,200 a month. $1,000 goes to the lease.. $200 goes into the 'trust account' and at the end of the year lease.. you have $2,400 for down payment. 4. Establish your responsiblities for maintenance on the home. What do you have fix/repair/etc. during the time you live there. In a rental contract the landlord fixes everything, in a lease to purchase this can be negotiated and a point of contention later on. 5. Get a real estate attorney to review the contract. The small fee ($200) for this review could save you thousands! I rented the home for a year and the lady seemed nice enough at the onset and we agreed to x-amount per month and y-amount of that total to be part of the down payment. I agreed to fix anything that broke under normal use. AFter we had been there for 4 months a real estate broker showed up with some clients and wanted to see the house. The lady was trying to sell it before the lease was up. It got really messy after that. An attorney is always a good thing to have on your side. Good luck and I hope this helps!
- Hi there. I don't have any answers to your question. Sorry but I did want to thank you for asking some advice from the others. I have been interested in knowing more about this myself & wondering if this kind of purchase really exists because I have heard of it but don't know anyone that has done this. I am also interested in knowing what you learn from our friends here. Thanks again & have a nice day.
