Think about it, when one Rents to Own what's in it for the Seller? Usually nothing, what's in it for you, well the opportunity to pay more per month and with a portion going toward the downpayment at a future date. If you do a RTO/LO the seller violates the lenders due on sale clause and the lender has the right to forclose (not that it will happen in this market), but the opperative word is "The Right". For reference you may refer to USC 1701 j3 (PS: I am not giving legal advice, you can do your due dilligence and then seek the advice of a qualified real estate attorney).
Let's say you find a RTO/LO sign all the documents but don't record it, what's to say the seller doesn't do an option with someone else. What if the Seller takes out another loan and overencumbers the property and by the time you want to excercise your option, he owes more than the agreed price?
What happens if the seller gets sued, loses and an attachment is placed on your property?
What happens if he or you get in trouble with the IRS? Any and all problems that could arise will efffect the title. So how do we avoid these problems? There is one vehicle I know of that will accomplish what you want to do, the catch is you'll have to call me 818-352-7290 for the answer. Look forward to talking with you Evelyn
The reason most owners do not wish to offer a "rent to own" option is because it is not in their best interest. It works great for a renter who would like a discount if they were later to buy the same home. But it does little for the seller who will usually be able to sell their home at market value rates. Why give someone a discount on purchasing when they can simply find another buyer willing to pay market value?
You've raised a question we hear periodically and have gotten some really great responses. Contact a local REALTOR serving the community in which you are interested in purchasing and they will be happy to point you in the right direction. If I can be of further assistance please don't hesistate to contact me.
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Rent to own properties are most common with houses / condos that are "for sale by owner." Rent to own properties are not very common, but they do exist.
The tricky part it is how to set up the rent to own agreement (eventual purchase price, cost for option to purchase, deposit required, etc). In a rent to own situation, the seller almost always wins.
The quick and easy answer is "rent to rent" and "buy to buy." Rent a property for now, build up your savings, boost your credit if necessary, and buy a property later.
Even if you were to find a rent to own property and you worked out an agreement, be careful of a potential baloon payment due in 5 to 10 years which would require you to re-finance the property with the seller or a bank. If you are unable to buy a property with a conventional loan right now, it might be difficult to come up with the baloon payment if and when it is required.
Feel free to contact me with any questions.
Anne has the right idea. There is no field to put into a listing that specifically says 'rent to own' as an option. In many cases, finding owners willing to rent-to-own takes a bit of work; certain types of criteria can be taken into consideration, such as days on market, and a certain level of intelligence to convey that that is a good option, especially if the property is overpriced.
If you would like some options, give me a call and we can chat. Good luck!
William Raveis Norwalk