Why you should opt for ‘rent to own’?
The real estate market is teeming with sellers but there never seems to be enough buyers who would want to buy the listed properties. Once a home owner lists his property for sale it takes a longtime before he gets a cal from a prospective buyer and an even greater amount of time before he actually gets to sell of his property.
What makes it so difficult to find buyers? This is because of the fact that the prices of real estate are considerably high for most average incoming families, and since most of us prefer to buy a home by taking finance from the bank so having a good credit history is a must.
The rent to own policy caters to those who have a good credit history as well as to those who do not have a good credit history; this policy allows the prospective buyer to lease the house for a certain period of time before finally sealing the deal of buying the house.
The rent to own policy is a sure shot way to ascertain whether the house you are planning to buy is worth the investment. In a typical rent to own agreement there is a nominal down payment required and the renter/buyer has to pay a monthly rent for the entire lease period. A fraction of the rent is escrowed to the purchase price of the property. At the end of the lease period the renter/ buyer has two options, he can ether buy the house, or he can evict the premises.
The purchase price of the house is pre determined so the buyers do not have to worry about the closing price of the property. No matter what the prices are at the end of the lease period, the seller must take the amount agreed upon by mutual consent between the buyer and the seller while making the agreement.
There are certain advantages of a rent to own contract, for example when you are under this contract then the seller cannot sell of the property to another buyer without your consent. Usually the term of the lease agreement ranges for one to three years, this period is negotiable and if you can increase the limit from three years to four then as a buyer you will have more time to accumulate funds and get finance.
If somehow due to any reason the buyer does not opt to buy the property by the end of the lease term then the contract simply expires and all the rent amount goes to the vendor, and that money includes the option money as well, so it is always advised not to pay a huge amount of option money unless you are very sure about buying the house.
The god part about h rent to own properties is that the buyers are not obligated to buy the property after the lease expires, the power rests in the hand of the buyer whether he wants to make the purchase or not.
So in case you do not have enough money to make a direct purchase it will be a good idea to opt for the rent to own policy.