Many times people are not able to buy a home at the time they want. A solution to the problem is to set up a lease to own a home. This is a contract between the renter or prospective buyer and the owner or prospective seller. It's not as complicated as it may seem if you have a little bit of help to get you started. Read on for it.
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Difficulty:
Moderate
Instructions
1
Find the home that you wish to eventually purchase. Many homes are advertised as "lease to own" or a real estate professional may help you in your search for properties that the current owner would consider a lease to own situation.
2
Negotiate the contract. The contract will not be a traditional sales contract, but rather will be drawn up as a Lease to Own Contract. The terms of the contract need to be clear. State how long you will be leasing before the contract agreement is to be renegotiated. Most time periods are 12 to 24 months, but can be longer or shorter as agreed upon by all the parties. State the monthly rent and how much, if not all, of the monthly rental that will go towards the down payment of the home purchase. Be sure to include all items in the contract that stay or go with the home while renting and when it is sold.
3
Take care of the home while you are renting. The seller will still have the option to not renegotiate or sell the property if you are not good renters.
4
Make the final decision when it is time to renegotiate the lease contract to one for a purchase. If you do not wish to purchase the home, then the money you invested as rent and possibly for the down payment will not be refunded to you. You will be in a position of needing to move. However, if you are ready to own the home, move forward with writing the new contract as a sales contract that would consider your monthly rental payments as the down payment or partial down payment on the home.
5
Close on your new home. You will go through the same title search, loan applications and closing process just as any other home purchase would. You will need to have all your credit records and required funds ready in order to close.
Tips & Warnings
The extra time you receive in renting gives you time to clean up your credit and save additional funds for the down payment of your future home.
Make sure that all terms are extremely clear and in writing in your Lease To Own Contract.
A rent-to-own lease agreement works a purchase agreement into the standard rental agreement involving a property. Rent-to-own agreements can be set up...
