Rent To Own Homes Near Me
Investing in a rent-to-own home offers opportunities that most people can’t find elsewhere in the real estate market. Most homeowners don’t require good credit before signing a rent-to-own agreement, and some contracts let potential homeowners live in the house for a period of time before purchasing the home to make sure that they want to buy it. Rent-to-own agreements help millions of people become homeowners that otherwise wouldn’t be able to purchase a home. Finding rent to own homes near you is easier than you think!
How To Find Rent To Own Homes Near Me
When searching for rent to own homes near me, it’s important to know where to look. Real estate agents, working directly with an owner, and browsing free rent-to-own listings are all great ways to find a home for sale.
Real Estate Agent
Real estate agents offer homes that are for sale, for sale via a rent-to-own agreement, or homes for rent. Ask friends and family members if they know a real estate agent that you can contact. Call or email local real estate agents and agencies to see what properties they have available, and to determine if any of them offer a rent-to-own agreement. Real estate agencies can usually answer this question in a quick phone call.
Finding Rent To Own Homes By Owner
Finding a home with a rent-to-own agreement by the owner can be a bit more challenging, but it’s not impossible. Many homeowners work with a real estate agency or agent. The agent simply acts as the point of contact for homeowners so you don’t talk to the homeowner. However, you’re still working with the owner.
If you’re not interested in rent-to-own agreements that involve an agent, you’re not out of luck. Avoid browsing for rent to own homes on Zillow and other websites. Check out social media, websites like Craigslist, and ask friends and family members if they know anyone that is selling their home.
Free Rent To Own Listings
Many websites offer free rent to own listings. Check out the websites for real estate agencies in your area. Some websites also offer comprehensive lists of properties that come with rent-to-own agreements. Check out renttoownlabs.com for a great selection! Other websites to look into include:
Browse through the comprehensive home listings to find a wealth of rent to own homes near you. Before deciding on a home, make sure that you know what to look for in rent to own homes.
What To Look For In Rent To Own Homes Near Me
It’s always a good idea to know what you’re looking for in a home while browsing listings. This can guarantee that you find the right home for your family, and don’t wind up with buyer’s remorse.
Decide on a budget before a house. Then, you’ll be able to tell whether a house is in your price range by simply looking at the purchase price. If the purchase price is too high, consider making an offer. Most homeowners are willing to negotiate the price if you make an offer.
Before agreeing to purchase a home, it’s critical to look at the purchase agreement. Lease-purchase agreements often allow people to rent a home before buying it. Some agreements state that there is an option to purchase the house after the lease is up while others state that it’s a requirement. The agreement will also include:
- The purchase price
- How much the option fee is
- How much rent goes towards the purchase price
- Conditions that will make the agreement null and void
It’s a great idea to have a real estate attorney review the contract with you to make sure that it’s in your best interest.
Consider The Company Or Owner
A quick Google search for the company or owner of the property can help you determine whether you would like to work with them. Keep an eye out for complaints with the Better Business Bureau, negative reviews, and poor reviews on social media. These can help you dodge a bullet.
How To Spot Rent To Own Scams
Rent-to-own home scams continue to increase in popularity. These scams often involve someone that might not even own the home pocketing your hard-earned money while you receive nothing. Some people don’t discover that they are involved in illegitimate rent-to-own contracts until they have invested thousands of dollars into a home. Keeping an eye out for these signs can help you avoid being scammed.
They Don’t Show The House In Person
A homeowner that is selling a home on their own will not be willing to show the house in person. This is because they either do not own the house or because they don’t want you to see their face. If you see them, you’ll be able to identify them later on down the road, including if you choose to press criminal charges.
The Agreement Looks Shady
Some scammers are surprisingly bad at scamming people. They don’t have the experience in the industry necessary to put together a decent rent-to-own agreement. The lease term might be vague and not include specific dates. The option fee may not even be listed. If you think an agreement looks shady, have a real estate attorney look it over to determine whether it’s legit.
They Are Unable To Provide Proof Of Ownership
If a person is selling a home, they should be able to provide proof of ownership. If they can’t, that’s a red flag. Keep in mind that this does not apply to real estate agents and agencies. They usually do not own the house, but simply represent the homeowner.
The House Is Underpriced Or Overpriced
Rent-to-own properties are typically listed at market value. Scammers will try to take advantage of people in tough financial situations by advertising low monthly payments or listing the rent-to-own property significantly under market value to make it appear more enticing.
Some scammers take the opposite route and list rent-to-own properties significantly above market value. This makes the property appear more desirable. The high price gives scammers the opportunity to cash in on higher monthly rent payments, too.
Avoid falling into this trap by checking out the market value for similar houses and comparing the price.
How Do Rent To Own Homes Work?
Rent-to-own homes are similar to renting a home, but a portion of the money often goes towards the purchase price of the house. There are several different types of rent-to-own contracts that renters need to know about before looking for a rent-to-own home.
Different Types Of Rent-To-Own Contracts And Terms
These are the main types of rental agreements that you will come across in your search for a rent-to-own home. Various rental agreements may have different terms, too. It’s important to understand this before signing on the dotted line.
The Lease Contract Is Similar To When Renting A House
The lease portion of the contract is similar to the rental agreement that most tenants sign. It will state the lease period, the responsibilities of the tenant regarding repairs, and when the lease period is over.
After The Lease Period Is Over, Purchasing The Home Is Possible
Contracts tend to vary regarding the terms and conditions for purchasing a home.
Some agreements will state that the potential buyer has the option of purchasing the home via a rent-to-own agreement. That means that when the rental period is over, the tenant will continue to pay rent. A portion of that rent will go towards buying the house.
Other agreements state that when the rental period is up, the tenant will purchase the house. This is a great agreement for tenants that need a year or two to increase their credit score to obtain financing for a house. Tenants will be required to work with mortgage lenders and have financing in place before the lease agreement ends.
This type of agreement is common in individuals that have had their mortgage application rejected because they do not meet the criteria for mortgage payments, such as needing a higher income or credit score.
Finally, there is the option to purchase the home. This means that the tenant can decide whether they would like to purchase the home once the lease is up. Often, this includes an option fee. Option money is paid upfront. Typically, option money is not refundable if a tenant decides that they do not want to purchase the home.
The Homeowner Always Retains The Deed To The House
After signing a rent-to-own contract, the tenant does not own the house. Instead, the homeowner retains the title and all ownership of the house. After the house is paid off, the tenant will receive the title.
A Portion Of The Rent Goes Towards The Purchase Of The House
Some homeowners will put all of the rent towards the purchase price of the house, but this is rare to find. Instead, most homeowners will put a portion of the rent towards the purchase of the home. The rest of it goes to the homeowner. Tenants essentially pay the homeowner to hold money for them and to hold the title of the house.
Every rent-to-own contract should clearly state how much rent money goes towards the purchase of the house. Make sure to take the time to determine how long it will take you to buy the house with the terms of the rent-to-own arrangement.
Most Agreements Include Cancellation Terms
This is the fine print that most people don’t read, and most people regret not reading. Typically, a rent-to-own deal will list terms that make the rent-to-own deal null and void.
For example, a common term is that all payments must be made on time, but that there is a seven-day grace period. This means that if a tenant makes a payment two weeks late, the homeowner can consider the contract void and the tenant is no longer purchasing the house. This applies regardless of how much money the tenant has put towards the house.
For example, if a tenant is only three payments away from the final purchase price of the house, and they make a late payment, they just lost all of the money they had previously invested in the home. This is why it’s always important to read the fine print and to have an attorney review the contract with you.
Tenants Are Still Required To Abide By Terms In The Lease
Until the house has been purchased, the tenant is still required to abide by the terms of the lease. This is especially true during the rental period. That means that they might not be able to have pets, unauthorized people living in the house, etc. Some homeowners extend these same terms into the period when the tenant is purchasing the home in case the sale falls through. Until you have the title to the home, it’s important to follow all terms and conditions.
Purchasing a home through a rent-to-own agreement has allowed millions of people to purchase a home for fair market value when other circumstances prevented home ownership. Make sure to check out the rest of our blogs to learn more about purchasing a home or selling a house!