Financing in Virginia Beach>Question Details

Robert H. As…, Real Estate Pro in Virginia Beach, VA

Does anyone have a successful rent to own story to share?

Asked by Robert H. Ashburner, Jr., Virginia Beach, VA Fri Mar 1, 2013

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6
I have the opposite i'll tell you all about next time we do coffee!
1 vote Thank Flag Link Fri Mar 1, 2013
One of our Rent To Own buyers is getting a new loan through Bank of America next month. (Rent credits usually just come off the purchase price, they don't account as money down).

We did have a rent to own buyer default this year. They had military orders out of the country. So lucky for them, they could walk away, and we just get the house back. Had they owned the house and had a traditional mortgage, they would have a short sale right now. So for them, it worked.

Good option for the Military if you're unsure of future orders.

Drew

P.S. We have three rent to owns coming available now if anyone is interested, 2 in Virginia Beach, 1 in Chesapeake.
0 votes Thank Flag Link Thu Aug 29, 2013
I have been asked a few times recently about people renting to own and it is important to understand the mortgage qualifying guideline to use rent credit. A rent credit can be used when the renter has been paying above market rent price, as determined by an appraiser, and the difference amount applied as the rent credit. So in essence, you will have to have been paying a higher than market rent amount to get a rent credit to work. This will be documented by cancelled rent checks and a copy of the rental/purchase agreement. In my experience I have not seen one.
0 votes Thank Flag Link Thu Aug 29, 2013
I am about to close on my Virginia home and I feel it's been a great solution for both sides. My house had been on the market 2 years because of a new development down the street that had newer, bigger homes all in foreclosure that were a better deal. The buyer had a foreclosure on his record, and was in the mortgage time-out chair for another year. We agreed on a decent price for that time with a solid, non-refundable downpayment to ensure his performance. He paid my mortgage and handled all repairs, which was a welcome relief after two years of trying to sell. Now we're closing at a price that is 87% of current market value, which is a GREAT deal for him (though it doesn't make my old neighbors very happy!). I'm ok with it, because I collected the difference (or most of it) in rent over the last 15 months. Win-win....
0 votes Thank Flag Link Thu Aug 29, 2013
Jim, Good to read of your success and the success of the buyer. The market will heal your neighbors over time. So are you saying now is the time to by that Key West home?
Flag Thu Aug 29, 2013
Rent to own used to be very popular in the 80"s when interest rates were up around 17% and people couldn't sell their homes. They worked, but were hard to find. For a seller its a good deal, guaranteed income every month without the hassle of repairs and maintenance. For a buyer its a way in when you don't have the cash for a down payment. My guess is they will make a comeback with harder to move homes. The tax laws have changed, but for the right parties its a win win.
0 votes Thank Flag Link Thu Aug 29, 2013
Chris, Thank you for your input. Are you free for lunch next week?
Flag Thu Aug 29, 2013
We have 4 clients set to buy their rent to owns this year from us. We have had some people default in the past. Two on their own because of changing family circumstances, and another got bad advice from an attorney and they chose to default and subsequently lost in court.

Rent to owns aren't a bad thing, they can be useful in some situations.

Unfortunately there are more bad stories than good out there...

Alot of our clients came from those "bad" rent to own situations...

If it sounds too good to be true...like no money down...it probably is.

Drew
0 votes Thank Flag Link Fri Mar 1, 2013
Drew, It looks like most post picked up some traffice this morning. So my question to you is do you have an update to your 4 buyers set to close on rent to own contract in 2013? Hope all is well Bobby
Flag Thu Aug 29, 2013
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