Zillow Advice: Rent vs Buy - Can anyone explain rent to own and if it's worth it? http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ Zillow Advice | Zillow Real Estate I agree with Tim.&nbsp; Too ... http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ I agree with Tim.&nbsp; Too many variables which cannot be controlled.&nbsp; Best to avoid and wait until you can finance in a traditional manner. Wed, 18 Dec 2013 20:30:00 GMT http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ 2013-12-18T20:30:00Z In the scenario below the ... http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ In the scenario below the loan might be for $92,600 but the purchase price would be $100,000 so the appraisal must come in for that amount. If the buyer decides they don't want the house, or the lender won't give them a loan or the home does not appraise for $100k then the buyer (renter) defaults and they would lose $7,400 and be back on the street looking for a place to live. Rent to own is a horrible idea if you can even find one. Most renters are renters because they can't get a loan and to make a rent to own work you must get a loan. And in the scenario below there will also be closing costs that can add up to another couple thousand dollars the renter would need to come up with. Not a great deal and something best avoided.<br/><br/><br/>tim Wed, 18 Dec 2013 19:15:00 GMT http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ 2013-12-18T19:15:00Z A buyer can control a property ... http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ A buyer can control a property with usually just a small non-refundable deposit given to the seller.&nbsp; This can be a win/win situation for all parties involved if it is structured properly.&nbsp; All parties should consult an attorney to review the contract.&nbsp; <br/><br/>There are many different ways to structure this, but usually the buyer is given a credit each month off the purchase price.&nbsp; Here is an easy example:<br/><br/>Purchase price: $100,000<br/>Down payment: $5000<br/><br/>The non-refundable down payment goes toward the purchase price, so now the price is $95,000. <br/><br/>The buyer makes $1200 monthly payments to the seller and receives a $200 credit each month, which goes toward the purchase price.&nbsp; So at the end of one year, the buyer has $2400 in credits, which makes the new sale price $92,600. The buyer has the option to apply for a loan for this amount to purchase the price or walk away and&nbsp;lose their credits and down payment.&nbsp;<br/><br/>"Own nothing, control everything."&nbsp;&nbsp; - John D. Rockefeller<br/><br/>Good luck!<br/>&nbsp; Wed, 18 Dec 2013 19:02:00 GMT http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ 2013-12-18T19:02:00Z Rent to own is often presented ... http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ Rent to own is often presented as a way to buy when someone isn't ready to buy, so you should be aware of the realities:<br/><br/>1.&nbsp; There are almost no houses available for "rent to own" so finding your dream house is not likely. <br/>2.&nbsp; A substantial down payment is required, often 10% to 30%.&nbsp; This will not be refunded if you cannot obtain financing for the agreed upon price at the agreed upon date.<br/>3.&nbsp; Monthly rent is above market rent, and only the difference goes towards purchase.&nbsp;&nbsp; This is also lost if you are unable to get financing.<br/><br/>In general, rent to own favors the seller.&nbsp; Only a tiny percentage of these become owned, and the potential purchaser tends to lose a lot of money.&nbsp;&nbsp;&nbsp; <br/><br/> Wed, 18 Dec 2013 18:30:00 GMT http://www.zillow.com/advice-thread/Can-anyone-explain-rent-to-own-and-if-it%27s-worth-it/521956/ 2013-12-18T18:30:00Z