Are there any rent to own properties that truly exist in houston,tx ?

Asked by shegotherown.dp, Houston, TX Thu Jun 27, 2013

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Al Geffon, Agent, Houston, TX
Thu Jun 27, 2013
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First and foremost, Texas Realtors are not permitted to participate in lease/purchase or "rent-to-own" transactions. You'd need an attorney to draw up two separate contracts ... one for the lease, the other for the sale.

These are outstanding opportunities ... for the property owner! All the risk is on the tenant/buyer, and the landlord/seller still retains the house in the event of default or failure to close, in addition to keeping all the money.

In this market, there are few if any such homes available. With properties selling almost as fast as they're listed, why would an owner enter into such an agreement, when he/she can cash out and be done with the place in a matter of weeks? If by chance you ever come across one offered as rent-to-own, it would likely be in a less-than-desirable location, have serious issues, or both.

Contrary to common belief, there is generally a large deposit required (about 20%, non-refundable in the event the sale doesn't materialize), little or none of the rent would be credited toward the down payment, the interest on the sale portion would be at least twice the going bank rate, and you'd still have to qualify for a mortgage in a few years to pay off the owner (it's referred to as the "balloon").

I assume that you're considering this transaction because you do not have a sufficient down payment at this time. The last thing you want to do is to purchase a home on a shoestring, irrespective of financing. I always recommend that potential buyers figure their current monthly expenses to the dollar, then add 15%. If the number is comfortable, it's reasonably safe to proceed. Of course, the down payment would need to be in cash ... I always advise my buyers to have 6% to 8% of the sales price at hand for an FHA-insured loan, to cover all upfront costs including the down payment..

My advice is to lease until you've accumulated sufficient cash to proceed with a purchase. Keep your FICO score at least in the mid-600's (of course, the higher the better) and focus on the objective. You'll be there before you know it. I wish you well.

Regards ...

Al Geffon
(713) 213-6350
al@geffon.net
Web Reference:  http://www.har.com/algeffon
1 vote
Congratulations on your new addition! You're on the right track ... lease until you're ready to buy, work on your credit, and accumulate sufficient cash to make the purchase easier. I'll be happy to assist you in finding a suitable rental property ... then when you're ready to "pull the trigger," we can take that step with confidence. Please feel free to e-mail me at ... al@geffon.net ... I'll need a little more information in order to narrow the field. There is no cost to you as a tenant ... the property owner compensates me. I look forward to hearing back from you.
Flag Fri Jun 28, 2013
Thanks alot to the both of you. My fiance and I were planning to buy in a year after we've gotten our credit scores right. We're expecting some additional funds in the near future that will allow us to take care of the down payment and closing. I've also been researching the first time home buyer programs to take advantage of the grants offered. We would like to rent a nice affordable place to save money as we now have a 4month old we're trying to provide a good life for. We'd been seeing sites advertising those types of properties so I'm looking into all options.
Flag Thu Jun 27, 2013
Randy Canales, Agent, cypress, TX
Tue Jul 9, 2013
Hardly any in Houston. It simply doesn't make sense to rent to own from a sellers preservative since we are in a HOT sellers market now. The only reason someone will place their home on the market as a rent to own is usually because its way too over priced and won't get appraised.
0 votes
Diane Schrak…, Agent, Houston, TX
Thu Jun 27, 2013
Hello!

I do not see very many rent to own properties. The property has to be paid off in order for the seller to do a sale like this. Very risky for the buyer and you usually have to put a large chunk of money down. I can help you find a rental if you would like. My contact information is below. I hope to hear from you soon!

Diane Schrakamp
Total Real Estate Services
832-620-6304
dschrakamp@gmail.com
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