We work with buyers of new homes who own homes that are often currently underwater. Since they cannot sell their existing home right now, they often choose to buy the new home now at today's great prices and rent their existing homes while they wait for their equity position to recover to the point they can sell for market value. There could be some opportunities for you depending on the area you are seeking and your budget.
I see you are a broker, do you have a favorite realtor that uses your firm? You are welcome to give him/her my email.
Rent to own situations are hard to come by, and GOOD rent to own opportunities are VERY HARD to find. Here is the deal with rent to own. Often the seller wants to do a rent to own for a few possible reasons, but usually it is for a combination of these reasons not just one reason or another. And all the reasons mostly benefit the seller. Reasons for an owner to offer a lease purchase:
The number one reason owners will try to offer a â€œrent to own optionâ€ is MONEY, because they cannot sell the property for the right amount of money they would like (or need to get because of what they own on it) to get out of it. Rent to own situations, unless you know someone so they have given trust in the other party are 99% of the time slanted in the owners favor.
Usually the property is a HARD to sell property (for some reason or a combination of reasons â€“ usually bad location, poor quality, market conditions are bad or they owe more than they can sell the property for etc.) so they rent it and offer the option for the tenant to purchase at a later date so that the tenant will be a long term occupant and is more likely to take care of the property they hope to buy in the future.
The owner offers the â€œrent to own optionâ€ so they can charge more monthly rent. They usually say something like this: I will rent the property to you with the option to buy and if you do buy it at the end of the lease I will credit you back a $100 per month towards your down payment. They offer this because they know that the vast majority of the Rent to own situations rarely materialize because the tenant becomes very familiar with the property and wants to get it for a good deal and the seller wants to get the highest and best price.
Also owners will do a purchase contract with a rental period at the beginning or a (seller Financing) where the seller acts as the lender for a certain number of years because they know that the buyer has credit issues and cannot get a traditional loan. The seller is the lender and because they are taking a risk by acting as the lender they charge you a higher interest rate and take a sizeable down payment to protect their interest. The seller in these cases is usually much more savvy and knows that now basically they have a glorified renter who is paying a higher than normal rental rate and has put up a large cash down payment and they know that most of the time the tenant never gets ahead financially in part because they are paying too much for a house that they now have to pay to maintain etc etc. It seems smart to own instead of renting but at what elevated expense.
I could go on and on here but you would be best served in my humble opinion to rent an affordable place for 2-3 years and rebuild your credit if that is the issue. The market is not going to turn around super quickly and will like be low for the next few years. Buying with traditional financing is the safest and best way because then you are also more ready to deal with the expenses etc that come along with home ownership. Let a landlord be the responsible party for the maintenance and expenses etc. while you build stronger credit and a good cash savings.
Feel free to contact me with any other questions.