Rent to Own Industry NewsShould I Take the Deed Today, or Just Get a Purchase Option?
Technical financial and real estate jargon can intimidate would-be buyers, but it need not. Two such terms are 'rent to own' and 'getting the deed.' A realtor who works with rent to own homes in Memphis relates, 'A rent to own agreement gives the buyer control of a property, not full ownership, with the 'option' to purchase the property at the end of the contract period.' A vast selection of such rent to own properties can be found at RentToOwn.org.
When researching the term 'getting the deed,' a broker who specializes in owner financing in Indianapolis told me, 'Getting the deed is a transaction involving owner financed homes, where the deed of ownership transfers to the buyer, as well as the existing mortgage payments and terms.'
So, if you've found a rent to own home in Austin, do you take the lease option, or 'get the deed?' There are two optimal situations for getting the deed; sellers with poor credit, or buyers with poor credit. In the first scenario transfer of the deed and mortgage protects the buyer by giving them control of the financial situation. For buyers with a bad credit history (but current sufficient income,) getting the deed eliminates the loan approval process and provides instant financing. Lease options, on the other hand, are common when sellers with significant home equity want to maintain total control of their property and mortgage during the rental period.Maintenance Obligations
More and more, long-time renters are exploring home ownership, and rent to buy options in the market. Rent to own homes in Phoenix and other metropolitan areas are widely available. You can find thousands of rent to own listings at RentToOwn.org. The choices are many, which is a good thing. However; as renters consider home ownership, many considerations arise.
A friend of mine hoping to move out of an apartment was recently looking at rent to buy homes in Columbus, and soon realized the sizeable maintenance aspects in renting a home. Items like lawn care, landscaping, painting, and appliance maintenance are traditionally handled by landlords. In a rent to own situation, especially if the deed is transferred to the seller, these responsibilities fall directly on the renter.
On the plus side you have a yard to enjoy, as well as the pleasure of home improvement successes, giving pride of ownership. Over time, money invested in these areas will pay off. However; other maintenance issues such as a broken dishwasher, clogged sinks or a leaky roof aren't so glamorous. Rent to own houses in Jacksonville and other warm weather areas may also have unforeseen needs such as air conditioning maintenance. Those entering a rent to own agreement may do well to consider a home warranty. Think health 'insurance policy for the home.' Home warranties typically cover routine repairs on all major (and some minor) appliances. With small monthly premiums, a home warranty may be the best investment you'll make in your real estate venture.What is a Reasonable Option Fee and Rent Credit?
When making an offer, one of the biggest mistakes potential renters can make is failure to negotiate. You've done your homework. You know the price points in the area. Negotiate. People tend to accept terms 'as is', not questioning fees, rates, or the final purchase price. Offer a final sale price just under the average price you found for that area. If you find a Detroit rent to own house, where real estate is currently lagging, negotiation can be your key to entry. A rent to own contract is fair game for revisions just like any conventional real estate purchase agreement. RentToOwn.org offers a free rent to own guide, which is helpful in this, and many other areas.