rent with the option to buy

how does this work? is this up to the parties involved?

TIA

Re: rent with the option to buy

I've never heard of that about apartments. I've only heard that about cars (lease w/an option to buy at the end of the lease)

Re: rent with the option to buy

Ive seen that with house listings. i have no idea how it works though - did you see a listing that you were interested like that? I would call the seller and ask.

Re: rent with the option to buy

i dont think its common, but i know it is done.

Re: rent with the option to buy

it becomes more common in unsteady real estate markets when sellers don't have a lot of options. I saw two houses in newsday today listed this way. One was in Yapank, the other in Selden-I think.
Sometimes the seller will hold the mortgage for a short time till the renter/buyer can get approved.
In the last few years 98% of working people could quailify for some sort of mortgage, conventional or not so this situation isn't nessecary. As rates go up & it gets harder for people to get loans sellers look for alternate ways to get buyers.

Re: rent with the option to buy

that's an awesome idea though!! you can "try on" the house and neighborhood without making the commitment of buying. I love that concept!

Re: rent with the option to buy

its huge in the south. My father has a house in FL that he rents to own to another guy. This is actually the second family he has in the house. The first family rented to own for 3 years, decided to divorce and walked away from the house. Complete benefit to my dad. Now he has another guy in there.

It gives people with bad credit or no downpayment a chance for homeownership.

2 guys Leo works with are in the process of getting into houses by rent to own. 1 is North of Charlotte, an area that is suppose to boom due to a new factory in the next 10 years. The area now is shady, but its a craftsman style home. He is going to treat it as though he is renting, but if it booms, he is going to stay for ownership. The other guy has little credit and no downpayment money.

Re: rent with the option to buy

We were "toying" with the idea on the last apt we had...OMG...THANKFULLY we didn't go any further than talking about it...that place was from HELL!

Anyway....we didn't get too much into the particulars, but he mentioned something like a part of the rent would go towards the selling price. If we did go through with it there would have been contracts set up with the lawyers, etc.

Re: rent with the option to buy

I offered my condo with this option. The purchase price would be an agreed upon current value. If you want the buyer can add money to the monthly rent to be applied toward the future down payment of the home. That is not a requirement, but it helps accumulate money for a down payment. It can be a win-win but I rarely ever see it used and we ended up renting it without the option. There are a lot of other details that have to be worked out in advance, such as who will pay for inspections and closing and so forth.

Re: rent with the option to buy

A friend of mine is doing that with a house she has in FL. If the people decide to buy the house (they have 1 year), she will take the $$ they paid in rent off the price of the house. If they do not decide to buy, she is putting the house back on the market.