I've seen a lot of real estate signs recently from popular companies that say "rent while buying". How do these plans work?
2007-05-02 02:14:50 · 6 answers · asked by mike w 1 in Business & Finance ➔ Renting & Real Estate
We're in rural northern N.M. north of Santa Fe and we do them all the time.
Here is a super simple explanation
There are two types of rent to own programs the seller can give
1. Rent/Lease with an option to purchase
2. Rent/Lease with a right of first refusal
Under one you execute a lease for the rental and you negotiate a purchase agreement that both parties agree to but it will not be executed until a future date. Monthly payment to rent and a portion to accumulate for the renter/buyer in the event they execute the option to purchase according to purchase agreement. If they fail to execute the additional payments become rent.
Under two you execute a lease for the rental and you execute an agreement clause within the lease that stipulates that before the owner can sell to someone who has presented an offer that owner is willing to accept that the renter has the right to match the offer and acquire the property. In some cases a certain amount of money is paid for this right in most cases only the rent is collected.
Pretty simple actually just need the right representation and the right forms. It is usually done to allow a buyer to accumulate a down payment or when a buyer is not sure of a recent job promotion
I hope this simplified explanation works for you.
2007-05-02 03:57:27 · answer #1 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
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2016-07-18 23:22:40 · answer #2 · answered by Silvia 3 · 0⤊ 0⤋
Most "rent-to-own" plans use an x-year lease agreement. You pay a certain amount each month for the term of x-years (usually 2 or 3), and then at the end of the lease, you are given the option to buy the home. The rent you have paid is put towards the full price of the property, and you will be asked to pay the rest at the end of the term lease, if you wish to buy. If you do not, you will NOT receive a refund of the rent. You may or may not receive a refund of your deposit.
The good thing about rent-to-owns is that you can use the RTO as a credit reference, if you have been paying on time. You may have a better chance of getting a mortgage loan from your bank or credit union.
2007-05-02 02:43:30 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Rent-to-Own is also known as land contract. Basically, you move in and pay the owner rent. You usually sign a two or three year agreement (I've seen them as short as one!) where you will have the option of buying the home if you have satisfactorily held up your end of the agreement. It says in the contract that you will seek financing after the lease and whathaveyou.
You live in the home and take care of the home as if you owned it. I know of very few land contract agreements where the owner of the property takes care of the lawn and other basic maintenance. If this is something you are interested in, be sure you know that the taxes are being paid. You don't want to get a property that has a lien on it.
2007-05-02 06:54:21 · answer #4 · answered by YSIC 7 · 0⤊ 0⤋
You rent like normal and you pay so much extra depending on your contract. The extra goes toward the buying price of the house.
2007-05-02 02:20:25 · answer #5 · answered by sassssy 5 · 0⤊ 0⤋
Rent-To-Own Homes - http://RentToOwnHome.uzaev.com/?IsYT
2016-07-12 11:10:11 · answer #6 · answered by Armando 3 · 0⤊ 0⤋