The current real estate market certainly presents its share of problems for sellers. A lot of properties are listed, some have been on the market for a long time, and homeowners are frustrated about not being able to sell their homes as quickly as they would like.
If you're one of those frustrated sellers, you may want to consider the rent-to-own option. It can be an excellent way for a seller to make money. On the front end, you will be able to receive a down payment from the prospective buyer. You will also receive a certain amount of money in the form of rent every single month. And finally, when the property is purchased, you will receive the remainder of the purchase price.
In a rent-to-own contract, the buyer is called the tenant/buyer. This is because at the beginning of the agreement, they are a tenant; when the lease ends, they have the option to become a buyer. Most tenant/buyers are individuals with not-so-good credit or people who for some other reason are unable to qualify for a mortgage loan. With the help of this rent-to-own option, these individuals can repair their credit and prepare for the responsibility of buying a house at the same time.
The rent-to-own option usually involves two separate agreements. The first one is a standard rental agreement in which the tenant/buyer agrees to make rent payments at designated intervals for a certain length of time. The second one is actually an option-to-purchase contract, which also usually has two parts. The first part requires the tenant/buyer to pay a non-refundable down payment of 2-5% of the price of the property. (This money is similar to a security deposit and takes that home's listing off the market.) This part then paves the way for the second part, which gives the tenant/buyer the exclusive right to purchase the property. If they decide to buy at the end of the lease agreement, the tenant/buyer can then obtain a mortgage loan and purchase the house from the seller at the price originally agreed upon. If they choose not to buy, they are free to do so, but they will forfeit to the seller all of the rent credit money they have paid (as compensation to the seller for having the home off the market during the lease period).
Before you proceed with this option, you will want to make sure you understand your state's laws as they apply to rental agreements. Some states tend to favor the renter and some tend to favor the landlord. You need to know where you stand before deciding whether or not this option is right for you.
Overall, the rent-to-own option is a win-win for everyone. It helps a financially-challenged buyer get into a house almost immediately, and it provides the seller with a steady income for several years while the tenant/buyer shores up their financial position to eventually finalize the purchase.
Mark E. Moebius
CEO of MILJONAIR Development
3451 St. Albans Road
St. Albans MO 63073
636-300-9000
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Thank you for sharing your knowledge with us. We hope this will help other's in making decission, to buy there dream home at affordable price rent to own in cavite is one excellent choice to be consider.
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