Rent to own homes process options
If you are looking for a home to rent and purchase, you may have come across the term “rent to own.” This means that a seller is willing to rent out a home to you for a period of time as long as you agree to buy the house at the end of this time period. You can also rent-to-own with no purchase option if you prefer.
Rent-to-Own Homes Are Usually Less Expensive Than Buying
Rent-to-own homes are usually less expensive than buying outright because they allow people who do not have enough money saved up for a down payment or closing costs to get into their own house sooner rather than later. The seller gets regular payments on their mortgage and so does not have to worry about foreclosure or selling their home later at a loss.
The Rent To Own Process Is Very Similar To A Lease Option Agreement
The process is very similar to a lease option agreement in that both parties enter into an agreement whereby one party agrees to pay rent on premises owned by another party, who then agrees not only to continue renting the premises but also agrees that if certain conditions are met (e.g., continued timely payment of rent) then the buyer will have the right to purchase the property at a pre-agreed price.
When the buyer is ready to purchase the home, this option payment made by the buyer are credited to the purchase price of the home. If the buyer decides to not purchase the home in rent to own properties, all of the option money that was to be credited to the buyer stays with the seller. Option fees are sort of like an investment made by the buyer. If they decide not to purchase the property, they lose all of the option fee money they put into a rent to own homes free listings purchase. The seller would get the home back and any option money paid up front and any option money paid with the monthly payments stays with the seller. No money is returned to the buyer.
From there, the seller could put the house back on free listings rent to own homes on the market for a traditional sale or collect another option fee down payment and try again with a new buyer, or become a landlord with a straight rental.
Ideally, the buyer would purchase the home. Typically, they can do this anytime during the length of rent to own home agreement. It could be on day one or the last day or any day in between. Until that point, though, they make a monthly payment to the seller just as they would to a mortgage company.
