If you're looking for a single family home in West Palm Beach, and you are hoping to find a rent/option, you may want to ask your West Palm Beach realtor to look at rental homes.
While rent/options are scarcer than meteorite fragments, you are most likely to find them among rental homes because those owner are not in a hurry to sell.
In order to ultimately purchase your West Palm Beach home, you will need to find an owner who is willing to wait 2 to 3 years for you to clean your credit or accumulate enough for a down payment.
Someone selling a home in West Palm Beach is looking to close with 30-60 days. So this type of owner is highly unlikely to consider a rent/option.
If you enter into this type of arrangement to purchase a West Palm home, the owner is likely to ask you for a non-refundable deposit. That deposit will allow you to exercise your option to purchase within a certain period of time, usually two - three years.
During that time you will need to accumulate a sufficient sum to use toward a down payment, clean up any credit issues you have, and prepare yourself to purchase either for cash at the end of the option, or to obtain a mortgage when it is time to exercise that option and purchase.
If you're wondering why you'll need a mortgage at the end of the time period, it's because you are obligated to purchase (or lose your deposit) when the option terminates.
So, unless you are prepared to pay extravagant amounts each month to the owner during the 24 to 36 months you are renting, a mortgage will be a necessity.
For example, let's say you're renting a 2300 square home in West Palm Beach and paying $2500 per month in rent. Well, that's $30,000 per year. All rent, and all gone.
Okay, let's say you want to purchase that home over a 36 month period of time and the cost is going to be $275,000 when the option expired.
You have a couple of ways to do this: One, and the most common, is an advanced deposit up front, then a mad rush to save every penny over the years and fix your credit so you can get a mortgage.
Two, you have given your deposit up front (and this deposit will be credited against the deposit you will have to make when you purchase) and you pay money above the rent each month. These additional funds are also credited toward your eventual downpayment.
But, like the original deposit, they will be forfeited if you are unable to or choose not to exercise your purchase option.
With that information in mind, you may want to talk to a mortgage broker before you start searching for rent/option homes. (Call Preston Ware, mortgage broker, at 561-329-0075. He may be able to give you the answers you need.)
That way, you may get an idea of how much house you can actually afford now, as a renter, and later, as a buyer, assuming you are able to qualify for a mortgage at the proper time.
Marc Jablon, The Jablon Team
Re/Max Complete Solutions