Considering a Lease Purchase/Rent-to-Own? Tips for Both Sellers & Buyers

Rent-to-Own Deals: Smart Questions to Ask…

Whether you are looking to sale a home quickly or purchase real estate but your credit needs repair, a lease purchase (also known as a rent-to-own option) may be a viable solution for you.  Consider these questions before proceeding:

For Sellers of Real Estate:

Who will tend to the property and pay for routine maintenance?

Who pays for major repairs?

What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?

Will you manage the property yourself, or hire an agent?

What if the renters change their minds? Who keeps the money in the escrow account?

If the buyers change their minds, what will be required to put the property back on the market?

For Buyers of Real Estate:
How much of the rent is going to the down payment?

How locked in are you if you change your mind?

What will it cost you to get out of the deal?

How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?

Source: REALTOR® Magazine Online.