Rent vs Buy in Hingham>Question Details

M, Both Buyer and Seller in Boston, MA

Are sellers considering the rent to own option or rent to lease option in the pricier areas of the S Shore?

Asked by M, Boston, MA Sun Mar 22, 2009

And how does this all work? We don't have the large down payment to buy a house in today's market. We have to sell our house first to get one but we are in a highly rentable area in Boston with a few rental offers all ready - but not sales offers. So, we can rent our house out, rent a house on the South Shore with the intent to buy when we have accrued enough of a down payment. Idelly the places we like are Hingham, Cohasset, Scituate, and Duxbury. Is this a feasible option in today's market?

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8
Kevin Vitali’s answer
There are rent to won situations out there. I find they are waited very heavily to the seller. The seller has all the benefits and options and the buyer has none and risks a fair amount of money if they dont deliver on the purchase.

Many times a rent to own situation is considered because the renter has poor credit, lack of down payment or a combination of both. Instead of getting yourself into a predatory situation, it may be time to get your financial house in order.
0 votes Thank Flag Link Mon Oct 15, 2012
I don't know, but all the "rent to own" spam on Craigslist drove me so nuts this past summer it turned me away from dealing with those companies.
0 votes Thank Flag Link Sun Oct 14, 2012
M:
I would recommend selling your home and doing what it takes to get it sold. Then if you have too move into a low cost rental so that you can save the necessary down payment. Massachusetts is such a tenant favor state that rent to own is very hard to accomplish. It works much better in other parts of the country where prices are lower and the tenant is not held in such a favorable position. Ultimately, this is a family decision. Best
0 votes Thank Flag Link Mon Aug 29, 2011
I've found that a rent to own really rarely works. As a buyer you'd rather the opportunity to buy any home on the market to find the best home for your situation when you're ready ( in addition to not paying an above market rent for the " option " ).

As a seller... same deal. What are the odds that the buyer is the one person to pay the highest and best price when you are ready to sell? If you really want to sell... offer it to 10,000 buyers instead of 1 and get a higher price!
0 votes Thank Flag Link Tue Aug 23, 2011
Although Boston is an active rental market, the South Shore has lower volumes of rentals available due to its busy sales of homes. It is highly competitive in gaining a great rental home. You should shop and view some units so you are aware of the differences.
0 votes Thank Flag Link Wed Jul 6, 2011
You would be entering into a unique situation... the problem being that if a seller enters into this arrangement they could potentially lose a lot of money... since we are still in a depreciating market... one year from now the home may not appraise for the agreed upon price... therefore you cannot purchase the home if the appraisal will not cover the loan amount so the seller would have to sell it for less than they would have if they found a buyer.

With that said, there are sellers that would still be willing to do a lease option... there are companies that will help you facilitate the Lease Option, they have lawyers, Realtors, and the paperwork needed to put a lease option together. One you may find at http://www.4homesolution.com, as well as others you may find on google. They make money from the sale... usually negotiating a lower purchase price and inflating the price to you for a few thousand... they assume all the risk and agree to pay the owner in the event you do not, they have the lawyers and they have the banks (allows you to use you option payment and rents to use as a down payment). So you are basically paying for a system.

Anyway you take it... in my opinion, if your credit is fine and you do not need a lease option... price your home to sell and move on. If your home is the "Next one in line to sell" then you should be under agreement in 30 days and moving in 60... Good Luck!!

Gayle Barltett
Keller Williams Realty
Team South Coast
0 votes Thank Flag Link Thu Apr 16, 2009
While there is little, (or nothing), offered as a rental with an option to buy, once working with a Realtor who is willing to network with other brokers in your target area, you might be able to find something. The complication is finding a property you like well enough to buy which is owned by a seller willing to rent first. A better option may be to rent your current home while renting on the South Shore leaving your purchase options open for the time when you are really ready. Knowing your purchase price and financing options is key to locating the perfect property and to understanding a rental commitment that makes sense for both parties.
0 votes Thank Flag Link Sun Mar 22, 2009
There are many of sellers out there looking at a lease with option to buy as more and more homes sit vacant. It is definitely feasible. Talk to a mortgage originator and find out what reality is today. Will you be able to buy in a year or two? The option to buy is definitely very seller orientated, so make sure you hire an attorney.
Web Reference: http://www.thehousewiz.com
0 votes Thank Flag Link Sun Mar 22, 2009
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