RentToOwn-HouseFinder.com
leasing to own a house?
Does anyone know what paper work is involved or important or how to go about leasing to own a house. We have decided to look into this option with the house we have for sale and don't really know where to get the needed information.
Public Comments
- consult a lawyer
- Absolutley right, consult a lawyer and have him/her draw up the contracts. There are many ins and outs to lease optioning...for example, you have to know the financial situation of the person you are optioning to and have a reasonable belief that they will be able to execute the option, otherwise it is considered predatory. That's just one example but I work with clients who have a lease option program, and it is much more detailed than anyone who is not versed in this should enter into without consulting an attorney.
- Your question really is a combination of two types of situations. There is a "lease-option" contract which is a standard rental contract that last for a specified amount of time at the end of which the tenant has the right to purchase the home if desired. Most times a small portion of the monthly payment is calculated as the down payment and the loan is opened as a Refinance which is easier to obtain and usually has lower interest rates. The other term is "rent to own" or "owner finance" which means you are paying the current owner of the house rather than a mortgage company or 3rd party lender. Terms are agreed upon at beginning of contract, i.e, purchase price, length of term, early buy out options, etc. The tenant is responsible for all aspects of the property during this time, i.e, taxes, repairs, etc, just as if they were receiving financing from a bank. The thing to look out for in this situation is shady characters that have liens on their property and can not sell outright so they do a rent to own and then at the end of all of it the tenant finds out that they have these huge liens on the property and so they can't actually own the property free and clear. I don't know that a lawyer would be a necessity but if you can afford one it certainly wouldn't hurt. There are a lot of programs on the web that can explain more. I've had a lot of luck with both of these options and I have never had a 3rd party involved. Best of luck.
