How to Rent a Home With Option to Buy
Buying a home is part of the American dream, but for some it seems like a nearly impossible dream, and they rent a home for years and years. Renting a home with the option to buy it at a later date is one way of fulfilling this dream of home ownership. There are many different type of agreements to renting a home with an option to buy. Make sure you know all of the facts that you and the homeowner agree to before you sign anything.
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Instructions
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Find a home that you like and that the owner is willing to sell on rent to buy terms. Some real estate agencies have special listings for this type of agreement. You may even be able to make these kind of arrangements on your current rental home if you talk to the owner.
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Meet with the owner of the home you want to rent to buy. Both of you will have to agree to what type of terms you set up. One option is to pay monthly rent and a certain portion goes toward your down payment of the home. You live in the home during this time and are required to do the upkeep.
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Write down whatever terms you and the homeowner have agreed upon. Make sure you are able to live up to the terms of the arrangement. Negotiate the monthly payment amount, and what percent is going towards the actual down payment.
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Decide with the homeowner on how long they will extend the rent to own option. At the end of this time period you will be expected to get a traditional loan, using the rent to own portion you agreed upon as your down payment.
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Draw up a contract. When all of the terms are agreed upon, write up a contract that lists all of these terms and conditions. Make sure everything is clear to both parties. Everyone involved should sign the agreement and have it notarized. Keep copies of everything and give the homeowner copies of everything. You can also file this document with your county clerk’s office.
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Make the agreed upon payments. If you don’t you could be in default, just like a traditional loan and the owner would have the right to sell the home to someone else. Keep a detailed record as per the agreement, of what portion is going towards the down payment of the home.
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Tips & Warnings
Ask your current landlord if they will sell the property. You may be able to negotiate a portion of the rent you have paid over the years, as part of your down payment.
Be sure to understand all of the contracts before you sign them.
Check with other rent to own agents to be sure you are getting a fair arrangement.
