Home Buying in 90802>Question Details

Savvyavy, Home Seller in Long Beach, CA

Rent -to-Own Websites?

Asked by Savvyavy, Long Beach, CA Fri Feb 25, 2011

Do any of you know any rent to own websites that are legitimate? My husband and I are currently looking into this option but don't have many leads. I also worry about paying money to join a rent to own site in fear that it might be a scam.

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Answers

16
There are a number of legitimate sites. However, most that I'm aware of don't require a membership fee.

Though such sites are one way to find rent-to-owns, there are much better ways. I wrote a blog on the topic on how to find them. See http://bit.ly/findaleaseoption Please read it.

Finally, your payment to join a rent-to-own site (whether legitimate or a scam) is just a drop in the bucket compared with your potential investment in the actual property.

Hope that helps.
2 votes Thank Flag Link Fri Feb 25, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
I've used http://www.homestarsearch.com and got good results. Having said that, I would caution to be reasonable with expectations. You'll still need to contact the sellers and it takes time. We found ours by month 3, but it took some persistence. It's a great starting point though.
1 vote Thank Flag Link Mon Mar 4, 2013
Hey,

I would STEER CLEAR of rent to own websites that charge a fee to see their listings. It just doesn't make sense. If someone really wanted to sell(or rent to own a home) why would they run off so many people by charging a fee to see their listings? Ever heard of a Realtor charging to see listings??

You can get a very good deal with a rent to own home, you just need to be sure you do proper research and learn the pros and cons.

Good luck
1 vote Thank Flag Link Sun Feb 27, 2011
I agree with all the other great advice. I definitely wouldn't recommend paying anything upfront. The websites do exist and may be helpful in some areas but in Long Beach it may be difficult. Please send me an email if you would like a list of rentals or owner may carry options.

Best wishes,
Melissa McCrone
melissamccronerealty@gmail.com
1 vote Thank Flag Link Fri Feb 25, 2011
If you have to rent to own you probably shouldn't be buying yet. Rent to own homes are going to be higher priced and have higher interest rates
0 votes Thank Flag Link Mon Mar 4, 2013
Be careful with RENT TO OWN sites!!!


You should really think of renting and owning as TWO different things.


Rent to own is a risk to you the renter most of all!

What if:

1. Owner changes their mind and does not want to sale
2. Home looses value and at the end of the lease term is no longer worth the agreed upon purchase price
3. What if owner looses the home to foreclosure


I suggest you get yourself pre qualified for a mortgage. This is done at no charge, and will give you a clear idea of what you need to d o to get in a position to buy in the future. Get yourself a realtor to search for leases for you, try and commit to no more than one year at a time.

Best of luck to you!!!
Kawain Payne, Realtor
0 votes Thank Flag Link Mon Mar 4, 2013
Call a local realtor and ask them for help or to point you in the right direction
0 votes Thank Flag Link Mon Mar 4, 2013
From what I have learned, the landlord/seller often has many more benefits in this situation than the renter/buyer. It can work out, but it can be a difficult situation. I would recommend working with a local real estate agent who can help you get into this type of rent to own situation.

Best of luck!

Samantha Baksic
http://ocbeachcitiesrealestate.com/long-beach-homes/
714-330-2021
0 votes Thank Flag Link Wed May 2, 2012
Lease option or rent to own, can work, BUT there are so many ways they can go bad. Work with a good REALTOR and a good loan officer to find out how you can buy. Maybe a situation where the seller will hold the paper. Just make sure they have clear title with no liens.
0 votes Thank Flag Link Fri Feb 25, 2011
I have attended many classes on options for purchase. The attorneys are telling us that the lease options hold many challenges and minimal protection for the renter/leasee opting to purchase the home based on the agreement. Basically many loop holes for the seller to not have to sell. Everyone is at risk. I would suggest you consult with a real estate attorney before venturing into this type of transaction.
0 votes Thank Flag Link Fri Feb 25, 2011
You will find most of these websites will givve you a list of properties they claim to be rent to own. When you contact the owner they have no interest in such a deal.

Also rentn to owns are dangerous. The idea is you will pay the lender a sizable deposit and then a monthly payment that is more than his/her mortgage. You are trusting the seller to in fact pay the mortgage. If you don't the home will be foreclosed upon eventually and you will lose all the money you have put in.

If you pay the mortgage and the lender realizes it they can call the loan immediately.. You or the seller will need to come up with the balance of the loan withing about 30 days.

All of this makes the FHA option more agreeable. If you would like purse that route please call me at 323.230.9775
0 votes Thank Flag Link Fri Feb 25, 2011
You might not get as much traffic from those sites as you'd hope. You should consider listing with a flat-fee service provider or a full-service agent in addition to marketing your property via those sites. Additionally, you should consider collaborating with another investor (especially a wholesaler) to help you to market the property. That way you'd cover all of your bases.

Additionally, please send me some more info about the property and proposal, because I might be interested in buying it too. Plus, you might want to check out one of the local REI clubs in your area. I know there are some good ones in the LA area.
0 votes Thank Flag Link Fri Feb 25, 2011
Dear Savvy,
With FHA loans requiring only 3.5% down, I am not sure that rent to own is an option you should be looking into unless you have credit scores that make it impossible for you to obtain a loan. If you meet certain income requirements, you may even qualify for 1% down financing under a program available in California.

Rent to own requires a deposit, or that you pay above market rent. If you choose not to exercise your option, then you lose the money you have paid. In certain circumstances it can make sense, but it is usually a better deal for the landlord who is trying to rent out a property - or in your case, for a website operator.

Let me know if you would like more information on loans and financing.

Best regards,
Gene Scott
ERA Buy America Real Estate Services
562-212-2345
0 votes Thank Flag Link Fri Feb 25, 2011
Savvy,

You definitely want to have knowledgeable representation if you're doing this to make sure you don't get sucked into something you don't really want. Jane's advice is good, and you can also have your agent approach properties that have been on the market for a while to see if they might be open to that approach.

We have structured a number of these deals, and typically they buyer puts up a 3% non-refundable deposit, signs a lease for 6-12 months, as well as an option agreement to buy the property during the lease period. You don't close, you lose your money. This could be a good hedge against the market if it continues to drop - walk away from the deposit rather than losing more money - however with lender guidelines changing all the time you need to make sure you have a lender who will fund the deal. Talk to some reputable lenders and see if they will, and I would get an agreement for the seller to carry in the event you can no longer obtain financing if the guidelines change. This is not going to be easy but it is doable and can work out well for everyone if done properly and with eyes wide open.

Also, there have been comments on this subject from out of area agents/brokers to avoid these at all costs, but it turned out that was because in those states they were done differently and buyers put up a lot more money. Get the facts and make the decision for yourself.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Fri Feb 25, 2011
The best thing to do is to as an agent to find you options under the "Financing", in the MLS that say, "Owner May Carry". In a market where there are many listings sometimes owners will be willing to take on financing and actually act as the lender. Real Estate agents can do a search for these "Owner May Carry", properties right from the MLS.

This way you are being represented by a Real Estate Agent and not likely to enter into any scam situations.

~~~~~
0 votes Thank Flag Link Fri Feb 25, 2011
Let me ask you WHY you would even want to do a rent to own? How familiar are you with them and do you totally understand how they work?
Curious.
0 votes Thank Flag Link Fri Feb 25, 2011
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