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Sellers gain rent and a tenant that will care for the property, while the buyer can try out homeownership without committing to purchase. Additionally, it can be a pathway for buyers with bad credit or unsteady income. However, dishonest sellers may use rent-to-own contracts to take advantage of buyers, and buyers can also find themselves at a loss if they can’t secure financing or have to move.In a rent-to-own arrangement, the seller will charge the buyer rent during the leasing term. Usually, part of the rent is held in a fund to be used toward the purchase of the home. Because of this, the rent is often higher than that of traditional rental properties. If the buyer decides to walk away, these funds are forfeit. A dishonest seller may even attempt to dissuade the buyer from purchasing the home so that they can keep these funds.
In addition to rent, sellers often charge buyers a lease option fee. This non-refundable fee ensures the buyer's option to buy the home at the end of the lease. This fee ranges between 2.5-7% of the home's purchase price, which can cost the buyer thousands of dollars. A seller may apply the fee toward the purchase of the property.
Buyers who aren’t charged the fee should be wary, however. Sellers may not charge the fee when they label the agreement a "lease-purchase," rather than a lease-option, effectively stripping the buyer of their right to walk away.
Home Buyers should also make sure the contract specifies a purchase price. Dishonest sellers may attempt to leave the price vague so that they can trap the buyer into paying more for the home, either through a higher price or a forfeited investment into the property. It's usually more advantageous for buyer to lock in a price at the current value, as most homes increase in value over time. In the event the home diminishes in value, the buyer can simply walk away.
It's also important for both buyers and sellers to determine who will maintain the home and pay required fees, like taxes. While landlords typically take care of this, some sellers may force the buyer to maintain the home. This is disadvantageous to buyers, as it requires them to invest in a home they may not buy.
Buyers should understand the risk of signing a rent-to-own contract, as it costs money to walk away. At the end of the lease, the buyer must decide if they want to purchase the home. This usually requires financing. If the buyer cannot attain financing, they lose any money paid toward the home.
For more information about rent-to-own homes, contact us at (281) 212-3040 or visit http://www.sellmyhousecash.today/ for more information.
Contact Info:
Name: Sell My House Cash Today
Email: Send Email
Organization: Sell My House Cash Today
Phone: 281-212-3040
Website: http://www.sellmyhousecash.today
Release ID: 293648
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