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!
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
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.
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.
This way you are being represented by a Real Estate Agent and not likely to enter into any scam situations.
Best of luck!
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
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.
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.
ERA Buy America Real Estate Services
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.
Lance King/Owner-Managing Broker