How to Rent a House With the Option to Buy
The American dream of owning a home seems unreachable for those with bad credit or no down payment. Yet, in a buyer's market, more builders and home owners are opting to deploy the rent-to-own option. With this option, doors open. The renter provides a down payment to be decided in the contract and a portion of money between $300 and $400 added to rent that would go towards the purchase of the property in the future
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Instructions
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Find a home. Most rent-to-buy options are offered by home owners anxious to make a sale. Homes that have been on the market for awhile are your best bet. Searching real estates sites such as www.foresalebyowner.com, you can find homes or condominiums in your area that are for sale.
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Contact the owner and ask if he would consider a rent-to-buy option. If he is unsure, you can offer additional information including your current job situation, finances and anything else that would build your credibility. Next, leave your contact information.
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Ask your current landlord. If you are already renting a single family home or a condominium, you could ask the landlord if he would be interested in a rent-to-buy option. You are in better standing if you have been a dependable tenant, making payments on time.
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Negotiate a contract. When you find an interested owner, you will need to discuss when you can begin your rent-to-own contract and how much it will cost. Most renters will want money up front along with additional money added to the rent that will go towards the purchase. The end of the term could be from 12 to 36 months.
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Be savvy. Often, the renter who is not in a financial position to buy, even after two or three years, is no better off after a few years, and is still unable to obtain a mortgage at the end of the lease. In this case, the renter loses all down payment money and investment money paid each month. It is good idea, then, to consult with a financial adviser or mortgage specialist and weigh the risks before entering into a rent-to-buy option.
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Take your time. If money is not an issue, but you want more time to decide before you take up permanent residence, consider an upscale condominium. Many builders of luxury condominiums in New York and other major cities offer the rent-to-buy option due to downswings in the housing market.
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Tips & Warnings
Make sure the property is not in a foreclosure status. If the property is taken by the bank, the lease is automatically terminated and you will lose any money you put into the rent-to-buy agreement.
