The real estate market has many rent to own houses available. A rent to own home is a fantastic way of acquiring home ownership without dealing with mortgage companies or banks. Throughout the past 10 years, this industry has helped thousands of individuals and families get into the home of there dreams without the typical headaches.

The idea of “rent to own” or “rent with an option to buy” is growing rapidly and a popular solution to many obstacles in buying a home. Some choose the option to overcome credit issues, meet the neighbors, convenience..etc. The overall consensus shows that a rent to own home can be a perfect solution.

A rent to own home is where you lease a home, but you also control the property by having the option to purchase it at any time during your lease period. The owner can not market the home for sale, since he/she is bound by their agreement to sell the home to you at a pre-determined price that you agree on before you move in.

There is two parts to the agreement.  The first is a standard lease that lists the monthly rent, tenant/owner responsibilities, and other standard lease terms. The second part is a Real Estate Option. This is a one way agreement that binds the Seller to sell to you at an agreed upon price within a specified period of time. The Seller has to sell when you want to buy (during the option term), but you don’t have to buy if you don’t want to. That is why it is a one way agreement.  The choice is yours.

The lease option has a fixed period after which it expires. The term is typically one year and is negotiated between you and the owner. To secure the rent to own option, an option fee is necessary. This is known as “Option Consideration”. This consideration is compensation to the owner for taking the property off the market and to guarantee a future price to you. The rent to own option consideration will be applied as a reduction to the purchase price at the time you decide to buy. Or it could be counted as a down payment in order to help you qualify for a loan.

If you decide not to purchase the property, the rent to own option consideration is NOT refunded. It is kept as compensation by the owner for guaranteeing the price to you for a fixed period of time. Your intent should therefore always be to buy the home once you enter into a rent to own agreement. The option consideration is typically 2.25% to 5% of the agreed upon purchase price and is negotiated up front. The higher the down payment you have, the more attractive it is to the Seller to sell to you instead of to other people also interested in the same home. Additionally, it makes it easier to qualify for a loan later on as your down payment has already been made.

Would you like part of your rent payment to be savings for you.  This is not true for your present landlord but it is part of the “Rent to Own” agreement.  Part of your rent payment is credited towards the purchase price of the home or used as part of the down payment if needed when you apply for a loan.  Example:  Let’s say you rent the home for 12 months.  Your credit score is in range to get a 30 yr. fixed loan with a low interest rates and payments that fit your budget.  You will have a credit of approximately $1,200 that will reduce your purchase price even further or add to the down payment towards the purchase of the home. In other words, a portion of your rent is saved towards the purchase of your home instead of losing the entire amount to the landlord.  If you do not buy for any reason this is NOT a deposit and will not be refunded.  Make sure you are really committed to owning a home.

Even though you will be renting to own the house, under the option agreement the maintenance is the responsibility of you, the buyer. You will be responsible for all the regular house maintenance.  Examples:  If you break a window you fix it, if a toy gets caught in the toilet you get it out, if you poor cooking grease in the drain and it clogs the drain you snake it, you make a hole in the wall you patch/paint it.  This is preparation for home ownership.  Those who desire to own a home are already taking responsibility for there own actions and these are simply reasonable expectations.

Another great feature of a rent to own home is that with these programs, your future purchase price is fixed at time of option fee. This process also helps to prepare the buyer for the responsibilities of home ownership. So, from day one, if you take care of your home as if it were yours that day, you can reap the benefits of home ownership by building long term equity.

Any way you look at it, rent to own homes are an immediate answer and an intelligent alternative to conventional loans.

sales@clevelandhousingopportunities.com