RENT to OWN CONDO

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14/03/2017

What is the rent to own program?

But sometimes there is an alternative way to buy a home: a rent-to-own agreement, also called lease option or lease-to-own. When buyers sign this kind of contract, they agree to rent the home for a set amount of time before exercising an option to purchase the property when or before the lease expires

14/03/2017

What is a lease purchase agreement for real estate?

A Lease-Purchase Contract, also known as a Lease Purchase Agreement, is the heart of rent-to-own properties. It combines elements of a traditional rental agreement with an exclusive right of first refusal option for later purchase on the home. It is a shortened name for Lease with Option to Purchase Contract.

14/03/2017

What is a rent to own home?

These deals, also called rent-to-own and lease-option, usually require buyers to pay extra rents each month plus up-front fees of about 10%-20% of the purchase price. The regular rent then goes in owner's pocket (presumably to pay the mortgage), but the additional payments are used to buy down the price of the home.

19/03/2016

RENT TO OWN PROGRAM

How It Benefits Buyers

The main reason why a rent-to-own agreement appeals to buyers is a financial one.
If buyers don’t yet have the down payment or the monthly income to qualify for a mortgage but believe they will within the next couple of years, a lease option allows them to accelerate the path to home ownership.
By signing a contract now, the buyer locks in a purchase price, which means no worrying about rising home prices.

The buyer also does not have to worry about coming up with the money for property taxes, private mortgage insurance or homeowners insurance, and the seller will usually continue to pay for and complete any maintenance and repairs on the home.

Finally, by living in the home before deciding to purchase it, a buyer has the advantage of a lengthy test drive on the home before jumping into a major financial commitment.

Best of all, if the buyer decides to walk away from the deal, the only consequence is the loss of that portion of the rent paid that was above market rate.
If the buyer ends up purchasing the property, the seller will credit part of the rent back to the buyer, often more than the portion of rent that was above market rate.

How You Can Rent to Own
In a lease option, you rent a property at a cost slightly above market rate. Prior to moving in, you agree on a potential purchase date and purchase price for the home. You may buy the property at any point during the rental period up until the lease option expires.

If you do purchase the property, the seller will credit part of your rent back to you, usually more than the portion of your rent that was above market rate. You can put this money toward a down payment and closing costs, or keep it. The purpose of the above-market rent is to give the seller an incentive to complete the transaction. If you do not purchase the property, all of the rent you paid remains with the seller/developer, giving the seller/developer an incentive for taking the property off the market during the time you were renting it.