Profile picture for malindy22

Rent to own

I am wanting to do a rent to own on a property.  I would be taking over the payment so that the home didn't go into foreclosure.  Not only would I be helping the owners credit I wouldn't be throwing my money down the drain.  I am willing to put 8000.00 down on a property. 
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January 12 2011 - South Side
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It takes a special kind of person to do a rent to own successfully. It seems that you have the right intentions. First, I would recommend to consult with a mortgage professional to know how long it will take you to obtain conventional financing. Furthermore, one must make sure the contract is a win-win for both parties involved in the transaction. Finally, please ensure the Realtor has knowledge in this part of real estate.

Best of luck
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January 12 2011
Mlindy,
This is not a good choice for you as a buyer. Run from anyone who suggests that you rent to own. Buy when you are qualified for a mortage do not get into a rent to own contract if you are unqualified. The $8,000 you are willing to put down may actually go down the drain. The big question is will the bank allow you to assume the loan or is this some sort of under the table deal?? If so get out now!!

The rent to own contracts are a sellers tool to get people into houses. The process is that you will sign a contract saying that you will buy the home someday in the future 12 months-18months. You will put down a sizable Non-refundable option deposit which will be applied as a downpayment when you buy when and if you buy on time. Normally an 8%-10% deposit. At the end of the contract if you don't buy the house for the original terms you will lose your deposit. Now you get to start all over again after losing $5,000 to $10,000 it's better to rent until you are ready..

Best of Luck,

Thank you,
Bill Carey, Broker/Realtor
Certified Short Sale Seller Specialist
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January 12 2011
Control is the issue here.

Ensure that you are aware of everything sorrounding this transaction.

The current mortgage terms. How many months are they behind. Is there a pre payment penalty. Date of maturity. etc etc.

Also be aware of taxes and liens.

This is a good way to buy ah me in some cases but it is no different than an normal purchase or possibly more due dilligence is required because you are at the mercy of the seller to share information because you won't be able to access it with out their permission. So buyer beware and proceed with caution.
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January 12 2011
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Bill,

You have given some good advice, but please read Zillow's Good Neighbor Policy regarding spam and self-promotion and refrain from posting contact info in the discussion threads. Thanks and welcome to Zillow.
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January 12 2011
Profile picture for the_country_hick
This may not be a good idea. Often what is owed is far more than the house is worth. There are also some other issues. Perhaps the blog below could be of help if you want to go the rent to own route.
"How You Can Find and Buy a Lease-Option/Rent-to-Own Property"

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January 12 2011
Profile picture for sunnyview
If you plan to do a rent to own, you need an airtight contract that discusses what happens if you are unable to get financing on your own, what happens if the owner dies or is in a coma, who is responsible for paying taxes/liens/repairs, what happens if the owner or you decide to back out, what happens if the owner does not have clear title, what happens if the bank calls the loan, what happens if the property is worth less or won't appraise etc.

Many who rent to own have no contract or a crappy contract. Many have come here to ask for Advice on Zillow after spending thousands of dollars in deposits or repairs without any legal protection. Rent to own can work, but you need to know what will happen in the end. Pay a lawyer for a contract that protects you or don't buy rent to own. It gets really messy really fast and things happen.
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January 12 2011
 
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