Dear Team Zuhl,
We want to sell our home but are having a tough time getting the price we want. Is selling our home as a “Rent to Buy” a good option for us?
Harry and Harriet Homeowners
Dear Harry and Harriet,
When you offer a Rent to Buy or Rent to Own agreement, you and the renters sign a contract in which the renter agrees to rent the property for a specified time, let’s say one year, at above the normal rent. The excess rent that they pay is credited after the length of the contract toward a down payment. After the rental contract is over and they have accumulated a down payment, they buy the house, usually at a price agreed upon when the home was originally rented.
This is a good option for you if your home isn’t selling fast enough and you can negotiate a contract that gives you the price that you want.
This is a bad option for you if you need the cash from the sale of your home to purchase a new home or for any reason. You won’t see full market value of your home for the term of the lease.
If you want to own your own home but aren’t quite ready, a rent-to-own home might be the perfect solution for you.
Here’s how it works – When you find a home that you love and are willing to buy, you negotiate a lease with the homeowner. In the lease, you agree to pay a higher than usual rent for a certain period of time, usually a year or two. The excess rent that you’re paying will be credited toward a downpayment. The lease also will stipulate the purchase price of the home that you agree to pay after the lease is us. After the rental period, you’ll buy the house at the price you agreed upon with the downpayment you’ve accumulated.
This may be a great option for you if you’ve found the perfect home but aren’t quite ready to buy it – maybe you don’t have the downpayment, or maybe you want to improve your credit so that you can get a better rate on your mortgage.
If you do decide to rent-to-own, be sure to have an attorney review your contract so that you’re protected in all situations.
Interested in a rent-to-own home? Here are the current listings in Union County.