Zillow Advice: Home Ownership - Rent to Owen and Sale of a contract what's the difference between the two . http://www.zillow.com/advice-thread/Rent-to-Owen-and-Sale-of-a-contract-what%27s-the-difference-between-the-two/515653/ Zillow Advice | Zillow Real Estate You mean sale on contract. ... http://www.zillow.com/advice-thread/Rent-to-Owen-and-Sale-of-a-contract-what%27s-the-difference-between-the-two/515653/ You mean sale on contract. They are pretty much the same and both should be avoided. Buyers/tenants who look for this form of potential 'ownership' have financial issues that prevent them from getting a normal loan. You do not want o deal with that as the potential for all sorts of problems can pop up. Just do a normal transaction. Thu, 17 Oct 2013 17:30:00 GMT http://www.zillow.com/advice-thread/Rent-to-Owen-and-Sale-of-a-contract-what%27s-the-difference-between-the-two/515653/ 2013-10-17T17:30:00Z Not sure what you mean by ... http://www.zillow.com/advice-thread/Rent-to-Owen-and-Sale-of-a-contract-what%27s-the-difference-between-the-two/515653/ Not sure what you mean by sale of contract. <br/><br/>Rent to own is when a renter rents a house and hopes to be able to buy it in a year or two. The renter MUST get a loan to be able to buy it or they will default and lose all the money they put up through the time they are there. You and the seller must agree on what price the house will sell for in a year, how can you do that is a good question, but it is required. You write up an contract and the renter puts up a large deposit that is non-refundable to the owner. Usually 10% is common. Then you add on about $100 each month to the rent you pay. This is called the option fee and the owner keeps it for the renter to use when they buy the house. It will be $1200 that goes toward the purchase. After the year is up the renter goes to a lender to see if they can get a loan to buy the house. The lender will do an appraisal and make sure the house is worth what the renter and owner have agreed on a year earlier. If it does not appraise or if the renter can not get a loan, then the renter defaults and moves out and loses the $1200 option money and the deposit. <br/><br/>This is why rent to own is so rare - IT DOES NOT WORK out for most renters because they can't get a loan.<br/><br/>tim Thu, 17 Oct 2013 15:57:00 GMT http://www.zillow.com/advice-thread/Rent-to-Owen-and-Sale-of-a-contract-what%27s-the-difference-between-the-two/515653/ 2013-10-17T15:57:00Z