RentToOwn-HouseFinder.com
What does it mean rent to own option on homes?
Public Comments
- You pay rent as you would a normal rental, but also have a contract to buy the house at a set price for a set time (You are not obligated to buy, but you have the option). Often you pay extra rent toward the down payment on the house for when/if you decide to buy
- It's a deal between you and the landlord that you generally will pay extra in rent, but you have the option of buying the home at a set price later on, and part of your rent will be applied to the cost of the home.
- it means that you can rent for a year and then count all that money as down payment on the house and then monthly payments untile its payed for. hope this helps
- Some people can't buy a home now but believe they will be able to in the future. They offer the landlord a price for the house at a future date like two years in the future. Then they rent the house for the two years paying a little extra each month for the option to buy at the set price. Hopefully during the years they can save enough for a down payment, get work history and improve their credit rating so qualify for a loan. Then the extra payments are applied to the down payment and the tenant can buy a house they already live in and not have to move. The seller thinks this is good because most people don't save the money and improve credit so they get a tenant that treats the rental as a home and pays extra every month. If they fail he can keep the money for his trouble and if they succeed he has a buyer. When house prices go up fast it is a better deal for the renter since they set the price two years ago and might start off with equity from appreciation. In times like these it isn't a great idea because prices come down, lenders aren't lending and if the landlord doesn't pay his mortgage your rental house might be foreclosed before you can buy it.
- Be-careful, because it all depends on the contract set-up between you and the land lord, because it could take effect right away when you pay your rent or it could be just paying rent and after a certain time then whatever you pay against your rent all, half and/or any amount could be applied to you owning it. Plus! Each state has different laws so check into it with your Fair Housing. I hope this makes more since too.
- jimdoted's right but it may also mean you have the option of first refusal such that seller submits his offer to sell only to you. Only after you reject offer will he submit it to others.
- If you enter into any kind of an agreement with the owner of a property in a lease option or lease purchase then you must hire an attorney who specializes in real estate to draw up the agreement. That agreement will specify the time frames, amount of down payment, price of the purchase and all the myriad conditions. Without that legal agreement you will be at the mercy of someone who probably has more experience and money than you do and will be a position to totally control the outcome. So, don't cheap out by not hiring an attorney of your own!
- There are two types of these things - "lease option" (where you start as a lease and have the option to purchase at some point under agreed terms) and "lease purchase" (where you start with a lease and are compelled to purchase at a certain point with a sale contract already written). Some of these things will allow you to have some of the lease monies credited against the purchase price. Some don't. It all depends on the state and the agreement. Basically, there is little to no reason to use lease purchase unless you have credit problems. If you are considering buying property X in the future then you should always go for lease option. It keeps things open for you. Listing real estate agents and landlords hate lease option, but love lease purchase. Never let a listing agent talk you into lease purchase. Never let a listing agent represent you as a dual agent. Always always always use an independent buyer's agent. Protect yourself.
