Zillow Advice: Buying Process - how does the rent-to-own works? Is it a scam? http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ Zillow Advice | Zillow Real Estate There are bonafide "rent ... http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ There are bonafide "rent to own" properties, but they are extraordinarily rare.&nbsp; There are also a number of rent to own scams, and many sites that promise rent to own properties but require a subscription (for very little benefit). &nbsp; <br/><br/><!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:RelyOnVML/> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]-->While the theoretical concept of rent with the option to buy may seem attractive, some of the realities are considerably less so.<br/><br/> Owners who will consider rent to own are very rare, so it will cut down your options for properties considerably.&nbsp;&nbsp; I consider it much smarter to spend a year or two working on improving your credit and (if necessary) saving up a good down payment.&nbsp;&nbsp; Yeah, it is tough to move but it even tougher to lose a lot of money attempting to buy.<br/><br/> Some features of rent to own:<br/><br/>1.&nbsp; Down payment required - often substantial (say 10% or 20% or more) and is non-refundable if the potential buyer doesn't purchase.<br/><br/>2.&nbsp; Monthly rental is above fair market rent, with the only amount going to purchase is the amount above the fair market rent.&nbsp; This is also not refundable.<br/><br/>3.&nbsp; If not qualified for financing at the agreed upon&nbsp; time and price, then you lose everything.&nbsp;<br/><br/> 4.&nbsp; The price is agreed upon at the beginning of the contract, and who knows where house prices are going.<br/><br/> 5.&nbsp; You still depend on the owner to pay their mortgage.&nbsp;&nbsp; If they fail, you lose.<br/><br/>If you do get involved in this, please involve an attorney in the contract.&nbsp;&nbsp; <!--[if gte mso 9]><xml> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="&#45;-"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> </xml><![endif]--><!--[if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-style-parent:""; line-height:115%; font-size:11.0pt; font-family:"Calibri","sans-serif";} </style> <![endif]--> Tue, 10 Sep 2013 19:08:00 GMT http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ 2013-09-10T19:08:00Z It is not a scam but much ... http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ It is not a scam but much harder to fallow thru and both parties to continue to agree on the terms. Wed, 11 Sep 2013 21:39:00 GMT http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ 2013-09-11T21:39:00Z it's not a scam by nature ... http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ <p>it's not a scam by nature but i'm sure there are scams out there.&nbsp;&nbsp;you need good representation to explain the risks.&nbsp; bottom-line if you don't complete the purchase at the end of contract period you lose your down payment and all of the equity you've been building throughout the years.</p> Wed, 11 Sep 2013 18:13:00 GMT http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ 2013-09-11T18:13:00Z It is not a scam by nature, ... http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ It is not a scam by nature, but it usually favors the landlord/seller. Only desparate people try to find one. Just wait until you can get a loan and do it the normal way. Tue, 10 Sep 2013 19:38:00 GMT http://www.zillow.com/advice-thread/how-does-the-rent-to-own-works-Is-it-a-scam/510767/ 2013-09-10T19:38:00Z