Benefits of a Rent to Own Home

The benefits of rent to own homes are immense. Buying properties by the rent to own method helps in acquiring the ownership of the concerned homes, without dealing with the banks and mortgage companies.

The idea of the rent to own properties is growing very briskly in the real estate market. Some people choose this option just for the sake of checking out the neighborhood, prior to giving full commitment of purchasing the property. The overall outlook of the rent to own homes, make them a perfect solution for the investors.

The agreement regarding the appropriate price of the house is done between the buyer and the landlord.

In some cases, the payments made towards the rent are accumulated by the landlord as payments towards the price of purchasing the property. In such cases, the landlord asks for a payment that is higher than a month's rent. This is done for substitution of a large down payment. But, these rates are negotiable.

Throughout the past 20 years, this industry has helped millions of individuals and families get into the home they want without all the hassle.

The idea of rent to own homes is growing rapidly. Some choose the option to try out a neighborhood before fully committing into buying a home and some are still undecided in their final job placement. The overall consensus shows that a rent to own home can be a perfect solution.

What are you paying for your rental home now? Stop paying your landlord every month so he can own your home. You can lease to a rent to own house that you want and by making your lease payments on time...and properly recording them...you can actually improve your credit to qualify for a home loan...possibly with zero down.

While your monthly rent is generally a bit higher than what you would pay in a rental situation, it is likely about the same as you would pay if your were able to obtain a zero down mortgage. Thus when you qualify to get your own loan you will not experience any payment shock.

Even though you will be renting to own the house, most times the maintenance is the responsibility of you, the buyer. You will be responsible for all the regular house maintenance including things like broken windows, clogged-up drains, painting/wallpapering, broken appliances, and lawn work. All major repairs for the overall house remain the owner's responsibility until the purchase is final.

This gets them their cash, pays off their mortgage, and allows them to move on with their lives. The reality is that while this is almost always the best solution, it is not always possible. Given the current market conditions, a traditional sale for full fair market value is not even all that likely.

Because of this, many more sellers are willing to consider alternative methods to sell. It is much easier to get a homeowner to agree to accept a rent to own contract than it was just a few years ago. This is especially true if you find a home owner that has a home for sale that is currently vacant. Making a mortgage payment on a home they are not living in can be motivation enough!

Just because there are more homes available for rent to own does not mean that finding a home that meets your needs is an easy task. After all, most sellers will only consider this option if they have already tried to sell their home and were met with considerable difficulty. Chances are, the rent to own homes you find may be a bit less desirable in one way or another because they were not already purchased by someone who qualifies for a mortgage loan.

It may not be that the home itself is less desirable. It may be that the owner is seeking a price that is above what market conditions require for a quick sale. The reality is that fair market value sales are few and far between because there is such an inventory of foreclosures and short sales.

It could also mean that you might have to do a little work on the home to get it up to the levels that you demand, but most rent to own homes are in fairly good condition. One way to find a home is to search for homes that have been on the market for a very long time. These homeowners are obviously having difficulty selling and may be much more open to hearing what you have to offer. You can also seek out a rent to own company that specializes in helping people just like you get into their dream homes!

How to Find a Rent to Own Home

As a general rule, it is safe to assume that most homeowners are not interested in offering a rent to own or lease to own option. Instead, most homeowners would prefer to sell their homes outright, allowing them to be done with it and move on. This means when the real estate market is booming, it can be almost impossible to find a rent to own home and it can also be difficult to find them in highly desirable areas. However, when the real estate market is slow or if the house in question is in a less desirable area, finding a rent to own home becomes considerably easier.

The first option is to simply approach seller and make them an offer. It is always fairly easy to find homes that are currently on the market and sometimes you can also see how long they have been on the market. Often, the longer a home has been on the market, the more receptive the owner might be to a rent to own home arrangement, though this is not always the case. Anyway, once you find the property you are interested in, you can approach the owner directly and propose a rent to own home arrangement and the seller can either accept or decline. Bear in mind that most rent to own home agreements are fully negotiable, so it is important to make your proposal with a good understanding of all the issues involved so you can address any questions or concerns the seller may have.

The other option is to go through a rent to own home provider service. These services generally have a list of available properties where the owner is willing to accept a rent to own home agreement and also have comprehensive contracts and processes in place to make the entire process run smoothly. This last can be a big money saver since presumably the provider service is already familiar with most of the issues involved in these arrangements, including many details that might be easily overlooked by non-professionals. Even if the provider service does not have a property that meets your requirements already available, they may be able to approach the property owner on your behalf and make a more convincing argument in support of accepting a rent to own home agreement.

Why a Rent to Own Home May Be Right For You!

If you have been thinking about getting a rent to own home but want to learn more about why it is a good decision, then you will want to read this article. Specifically, we are going to discuss how renting to own gives you easy entry into a home allowing you to enjoy the home now while working to improve your credit. After reading this article you should have a better idea if it is time for you to start looking at a rent to own home listings!

With credit standards tightening, more and more people are looking towards renting to own. It's no surprise, as renting to own allows just about anyone easy entry into a new home. One benefit is that the money required down is less than most mortgages these days. A typical option fee is between 2% and 5% of the purchase price of the home. As long as you have enough cash to pay the option fee, you can typically avoid any strict credit qualifying. Additionally, unlike qualifying for a conventional mortgage, there is very little paperwork or hassle.

It addition to offering easy entry, a key benefit of renting to own is that you don't have to wait until you qualify for a mortgage to begin enjoying your dream home! Many people get discouraged when they find out that their credit is not good enough to qualify for a mortgage. They feel that they will have to delay having the life they want until they can get their credit in line. With a rent to own home, you can begin enjoying your dream home now! You won't have to wait to make any changes to the home because most rent to own home contracts allow you to make improvements to the home without consulting the owner. So you and your family can enjoy most of the benefits of owning your own home without the wait!

Rent to own transactions, or lease option transactions as they are often called, have continued to grow each year for the last several years. Good people have had their credit "bruised" due to job loss, keeping them from qualifying for a home mortgage. This new economy has also produced a new breed of entrepreneurs, starting their own businesses out of necessity due to the job market. These new entrepreneurs have to produce a minimum of two years of documented income from this new business to qualify for a home mortgage. These "mortgage challenged" borrowers look to rent to own homes as a way to start down the path of home ownership. It's important to understand the main documents used when you rent to own homes, so let's take a look at them.

Important Documents when Buying a Rent to Own Homes:

Residential Lease Agreement

A rent to own transaction has two parts to it, a lease agreement executed concurrently with an option to purchase agreement. The first part of the transaction is covered by the Residential Lease Agreement. This agreement sets the terms for the lease when you rent to own homes. It sets the basics like the length of the lease, the monthly payment and the obligations of both tenant buyer and landlord. It is important that you have a written document that spells out everyone's responsibility in order to avoid confusion or disputes. Carefully review the lease agreement that you are considering so that you know what your responsibilities are (like lawn care, pest control, etc) and that you understand what they consider a default and the landlord's remedies for such.

Option to Purchase Agreement

The second part of the transaction is the Option to Purchase Agreement. This document gives the tenant buyer the right to purchase the home they are renting at any point during the term of the Option to Purchase Agreement. Usually the term of the Option Agreement matches the term of the Residential Lease Agreement.

The option agreement sets the purchase price of the home so that you know going into the transaction what you will have to pay to buy the home. It is also sets other terms of the agreement (whether or not option consideration is considered refundable, maintenance responsibility, etc). The Option to Purchase Agreement also shows the amount of money that was paid for the right to purchase the home, called Option Consideration. This is not a down payment, though it is typically applied toward the purchase price of the house. The option agreement must also have a legal description of the property being optioned as well as the obligations that if breached will result in forfeiture of the right to purchase the home.

This or the third common document, Memorandum of Option to Purchase Agreement, HAS to be recorded at the county register of deeds. By law, the Option to Purchase Agreement also has to give you the right to cancel the transaction by midnight of the third business day of signing the agreement by both parties.

Memorandum of Option Agreement

Often times, the owner of the home will opt to record a Memorandum of Option to Purchase Agreement rather than the actual Option to Purchase Agreement. This is perfectly legal under North Carolina General Statues. This memorandum serves to protect your interests as a tenant buyer. It produces a "cloud" on the title, letting the world know that you have the first option to purchase the home. The house cannot be sold without clearing that "cloud" so it cannot be sold out form under you. This memorandum has to be recorded with the county within 5 business days of signing the transaction.