Are you looking for a rent to own house or considering selling your home with rent to own?  If so, you are not alone.  Many people are turning to rent to own as a stepping stone to home ownership or as a method to sell their home in a down market.  In fact, both buyers and sellers are finding that rent to own is an effective strategy in the current market.

It makes sense.  Sellers can’t sell their home because the pool of qualified buyers in the market has shrunk dramatically.  Buyers are unable to get a mortgage, and therefore must consider other options.  Properly structured, rent to own homes provide a good solution for both parties.

Whether you are a buyer or seller, you will want to make sure your interests are protected.  Sellers will want contracts that avoid conveying equitable interest.  This means that should the buyer default, they will be able to evict them rather than being forced to wait on the foreclosure process followed by eviction. An improper contract structure can cost a seller six months or more if the buyer ends up defaulting.  Sellers will also expect to get full fair market value for their home.  A rent to own buyer should not expect to get a discount that someone would expect to get if they could qualify for a mortgage now.

Buyers will want to know that the home is not in foreclosure.  They will also need to make sure that the option period is long enough to give them a chance to repair their credit history. And, of course it is critical to buyers that the pre-determined purchase price be fair.  If the price is set too high and they are unable to get an appraisal in that amount, then it will not matter how much work they have done on their credit – they still will not be able to purchase the home.

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