Home Selling in Midway>Question Details

Christine, Home Seller in Midway, GA

I want to sell my home, but I know it will sit on the market forever. Is a rent to own better?

Asked by Christine, Midway, GA Tue Oct 28, 2008

Want to rent to own so we dont have two payments.

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The Lease Option is a good way to help minimize the loss from paying a mortgage on a vacant house, but the reason most people who rent to own want to rent to own is because they can't get a mortgage. In reality, something like 10% of lease options actually end up buying the house.

Some people who lease option are very qualified, but strange lending requirements make it impossible for them to get a loan. Others can't get loans because their bad credit indicates that they just don't handle money well. These people are not likely to change.
0 votes Thank Flag Link Mon Nov 24, 2008
rent-to-own is a great way to get above market rents on a property but it isn't really a way to sell the property. most rent-to-own tenants have issues and unless something dramatic happens they will still have the same issues in 1-2 years that is preventing them from purchasing today. instead of rent-to-own you may want to consider seller financing.
there are some differences between a rent-to-own and seller financing but those differences can be beneficial for both you and the buyer if done correctly. the problem with today's market is not the pricing of homes but the availability of credit (and consequently the ability to finance the homes). a seller finance gives the buyer ownership and puts them in a position to refinance down the road (which is much easier than the initial purchase financing). this gives the buyer the best chance to pay you off down the road.
in addition, you can get a better sales price than what is available in the market because your house comes with financing already in place, no banks to deal with. you will still want to qualify the buyer based on credit and references. and you'll probably want to do a seller finance note for at least 2 years so that the market will have time to support your sales price with an appraisal.
since there are a lot of different options available with seller financing, most of them in your favor, make sure you work with a realtor or attorney who is experienced with seller financing and can thoroughly explain it to you.
Web Reference: http://khayyamjones.com
0 votes Thank Flag Link Thu Nov 13, 2008
First and foremost you have to realize that its a buyers market and they set the price.
It all depends what your needs are?
Do you want to sell or do you NEED to sell?
If you want to sell it may take a while, if you need to sell then you need to price it at least 5% below market to have a chance at all to sell.
Leasing with an option is something you could do, but in todays market with prices dropping most future buyers are holding off to see how far the market will drop, they dont want to lock in on a price if its going to drop next month.
Your best bet is try to set a price you are comfortable with and have the other party agree, make sure you let a Real Estate Attorney handle the Lease and paper work.
Good luck
0 votes Thank Flag Link Tue Oct 28, 2008
Hi Christine,

At Miller and Company we offer both a full service real estate department for selling and buying properties and also a property management department for procuring a tenant either on a normal rental agreement or a lease to own agreement. We can market your home both ways and this will give you more options depending on what occurs first - a buyer or a tenant. Feel free to call me and I would be happy to go over your options.

Kristie
0 votes Thank Flag Link Tue Oct 28, 2008
Christine

A lease with option may be a good way to allow you out of your current home without the pain of having it sit empty and still making the payments. But there can be quite a few downfalls to a lease or rent to own from the seller side. You need to think of what the end result you want is. Are you going to turn around and buy something else with the proceeds? The problem with a lease to own is that the renters may never make it to that buying stage... there are horror stories of prople that have gone in and made changes while they were in the rental only to not be able to buy the house and not able to return it to the state it was originally in. Being a landlord is not easy and that is the position you are in as the seller on a rent to own. Generally, things are still selling in our market, but you need to listen to what your REALTOR is telling you and price it agressively. Don't get caught up in what it may have been worth 18 months ago. Feel free to contact us if you have more questions about selling or using a Lease with Option to Purchase to sell your home.
0 votes Thank Flag Link Tue Oct 28, 2008
as a seller wanting to lease purchase you need to consider a couple of things to make it smoother for you in the long as well as short terms. break the transaction into 2 parts, 2st teh sale and 2nd the lease. first make sure the person is qualified. have them meet with a mortgage lender and provide proof they can purchase now or in a certain amount of time such as 1 to 2 years. dont go out longer than two years. you want someoen who is credit qualified but just doesnt have the savings to buy today. If they are not quailified today chances are 2 years from now they will be in the same boat. On teh lease make sur ethey are paying the 1st months rent and 1 months security up front, if they dont even have that, chances are they will default on teh rent in just a couple of months. Set the lease price what the mortgage price would be. set it up so you add 3% to the sales price and offer it back towards the buyers closing costs if they close, as well build in 5% to the sales price and offer that back as down payment credit. you dont need to tell them you are building it in, just do it. so figure out what 5% of the purchase price is and divide by teh length of the lease and put down that as how much you woill credit them per month towards their deposit. dont forget references, credit check and pre approval letter. include a clause that can get you out of the lease if you hit financil straights, make sure a lawyer or someone in teh business writes this up for you, good luck with the sale.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Oct 28, 2008
GOOD QUESTION, work with a real estate agent regarding homes for sale in your area. Nov., Dec., Jan, Feb., are slow months to make attempts to sale a home most families are interested in holidays than shopping for residence. It depends on value of home, description authored, pic's overall marketing what could drive buyers to the location. RENT TO OWN, lease option are great ways to secure a long renter interested in purchasing.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Oct 28, 2008
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