Everything You Need To Know About Selling On A Rent-To-Own Basis
Selling a home used to require realtors, lenders, and a bunch of other professionals and institutions. Since so many were involved in a single home sale, sellers would lose a great chunk of sale value just from compensating all the hands that helped the sale go through. But today, rent-to-own financing is more ideal than the traditional home-selling method, and such explains why more and more individuals are pursuing the rent-to-own option over working with a conventional lender.
In the rent-to-own model, a homeowner leases a property to an investor. Then, the investor will rent and manage the property like a property manager would, and there’s an expectation that the investor will buy the property at some point during the lease term. This is called “lease option” or “lease purchase”. There are many perks for owners in this scenario:
- They keep getting tax benefits.
- They get rid of the headaches of owning/management.
- They have their mortgage taxes and insurance covered by the lease payment.
Also, the seller/lessor typically can get cash up front in addition to the lease rental payments. When the sale option is exercised by the buyer, it’s very smooth since most of that paperwork is filled out up front when the lease and option are signed. Leases can be anywhere from 2 years to auto renewing into perpetuity. Sellers get peace of mind that they can move on with life, and we can typically pay a little more in sale price (compared to what they’d net after commissions and closing costs) so sellers also can get their best price.
Here’s more on why the rent-to-own model is preferred in Ravenswood and how Full Price Offers is bringing all the benefits of this model to a variety of potential home sellers!
Get in touch with Full Price Offers when you need to get a home sold in the most financially ideal way. Our experts will discuss your unique preferences and requirements to ensure you get a can’t-beat offer!
What Is a Rent-to-Own Home?
Most home buyers need a mortgage to finance the purchase of a new house. Also, they must have good credit scores and cash for a down payment. Without these, the traditional route to homeownership may not be an ideal option. There is an alternative, however: A rent-to-own agreement, in which you rent a home for a certain amount of time, with the option to buy it before the lease expires. Rent-to-own agreements consist of two parts: a standard lease agreement and an option to buy.
Here’s a rundown of what to watch for and how the rent-to-own process works. It’s more complicated than renting, and you’ll need to take extra precautions to protect your interests. Doing so will help you figure out whether the deal is a good choice if you’re looking to buy a home.
A rent-to-own home is a house you can buy through a rent-to-own agreement. With this type of contract, a buyer agrees to rent a property for a specific time period before gaining ownership. The time period can range from several months to several years, depending on the specifics of the contract. Elect to work with us here at Full Price Offers when you want to enjoy a seamless process in Ravenswood. Like any other home, companies or individual sellers can own rent-to-own (or lease-to-own) homes, but they work much differently than the typical home buying process.
As part of the contract, the seller agrees to hold a designated amount of money of each rent payment to go toward the buyer’s equity in the home when they purchase it. If your dream home is available as a rent-to-own home, you would have to negotiate the terms with the company or individual seller who owns the property. And because everything from the purchase price to closing costs is negotiable with a rent-to-own home, the process can get a bit tricky.
There are two different types of rent-to-own agreements: a lease option agreement and a lease purchase agreement. With a lease option agreement, you have the option of purchasing the home after the agreed-upon time period. However, if you go with a lease purchase agreement, you are legally obligated to buy the house.
DID YOU KNOW?
Ravenswood was founded in 1868 as an exclusive commuter suburb by a group of real-estate speculators. These speculators formed the Ravenswood Land Company and purchased 194 acres of farmland and woods eight miles north of Chicago.
A Rent-To-Own Sale Is Quicker and Less Stressful Than a Traditional Sale
In short, the rent-to-own purchase model can be a good option for sellers whose houses have been on the market for a long time. Additionally, perhaps it’s more advantageous to rent in your area, and this can be done seamlessly through the rent-to-own model. Or, maybe interested buyers don’t have high enough credit or enough of a down payment to qualify for a mortgage. The rent-to-own option can attract potential buyers, for it gives them a chance to slowly build credit and pay down payments over time.
Just make sure your potential buyers have high enough credit to qualify for a loan when it’s time to buy. If you’re a landlord looking to sell your property and you want to use the rent-to-own model, you’ll need to consult an attorney and draft a contract or lease. There are no standard templates for this kind of lease option, but a trusted real estate attorney will know what to include. If you’re looking to move but you’re in no rush and not pressed for cash, few home-selling methods are better than the rent-to-own model!
How We Here at Full Price Offers Can Help You With a Rent-To-Own Sale
Need to sell your home quickly and for cash? Want a free, unique offer and high-quality customer support from start to finish? Get in touch with Full Price Offers today! We make selling on a rent-to-own basis in Ravenswood a breeze!