As a realtor, I get asked quite often about rent to own homes. I think they are a bad idea for several reasons. Thougths
1,795A lot of times, the seller charges the 'renter/buyer' about 50% more in rent and tells them that it'll apply towards their down payment when they are ready to buy. But there are usually clauses that allow the owner to evict the tenant if they are a little late on rent. So the buyer gets evicted and loses their money, and the owner starts again with the next sucker. The biggest problem, however, is that the lease term is generally not long enough for these buyers to fix their credit and qualify for a mortgage. When they can't qualify, they lose their money.? What advice do other realtors have for buyers who ask about rent to own homes? Would you recommend them?
2 answer(s)
About 10 years ago
I'm undecided. I've read several articles recently (some of them linked below) discussing this concept in regards to a new company that's come to Houston. In the Houston Business Journal article they quote two opposing opinions from brokers, so it seems to have people on both sides of the matter.
I have a client who is renting now and will be eligible (after her foreclosure) to buy again in about a year. She's very interested in the program so I read into it. I can see the reasons both for and against the concept. I think in respect to our responsibility to our clients we should remain neutral and provide the information about these programs just like we would any other. But, we should also strongly advise they see a lawyer to review the forms just as we do any contract.
Articles related :
I have a client who is renting now and will be eligible (after her foreclosure) to buy again in about a year. She's very interested in the program so I read into it. I can see the reasons both for and against the concept. I think in respect to our responsibility to our clients we should remain neutral and provide the information about these programs just like we would any other. But, we should also strongly advise they see a lawyer to review the forms just as we do any contract.
Articles related :
source:
http://www.houstonchronicle.com/business/columnists/sarnoff/article/Rent-to-own-deals-aim-to-open-doors-5237536.php<br>http://www.bizjournals.com/hous...
http://www.houstonchronicle.com/business/columnists/sarnoff/article/Rent-to-own-deals-aim-to-open-doors-5237536.php<br>http://www.bizjournals.com/hous...
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DislikeAbout 10 years ago
In any situation you must do your fiduciary duty. You must inform your clients to best of your ability and let them make their own decision. I would definitely inform them that there is not a promulgated form for a lease to own property sale. A lawyer should draw up a contract and all contracts should be read carefully and fully understood before signing.
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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