Rent to Own? – Part III

Published by cravat | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs, Uncategorized

When you have finally made your decision to get the house, the work is not over yet. You still need to go through understanding and piecing out the contract and what to look for in it.  On this level you can start asking your lawyer to write a contract from scratch but if you are cutting cost, you can utilize the standard form and get your attorney’s assistance with changing the specific clauses.

Contracts written by seller are likely to be in their advantage, so have your lawyer look at it and review it carefully. Here is what you need to look for in a contract:

 ·         Purchase price – Do not pay much more for a property on a rent to own option than you would to buy it now.

·         Down payment – Make a contract that applies any first fees to the purchase price of the home. The more you bid to put down, the more likely your suggestion is to be received. Few sellers require administration and option fees that are not applied to the purchased price.

·         Sum applied on the down payment – monthly expenses in rent to own option arrangements are usually higher than rent would be but the difference may be applied to the price of the home.

·         Duration of time the option is valid – A longer option period is more advantageous to you. Some were given 18 months. That was not a lot of time if you intend to clear out your credit and save the down payment but you can always find a way if you are determined. Also, remember to set provisions for when and how you can use the option. You also need to have a third party attend the paperwork signing to assist you to catch “gotcha” clauses. When you negotiate everything upfront then you be fine. A deal or transaction is awful if you do not know all the terms. 

Get ready to buy 

Once you start leasing, instantly start getting ready to purchase the property or you will fail to take your chance. Here is how: 

·         Fix your credit. If your credit standing is low, you can make good developments on it in a year or two. Clear up any other problems such as tax payments and commit to paying all your utilities on time.

·         Put away for your down payment.  Diligently save up for your down payment, a standard down payment is around twenty to thirty percent of the total purchase price.

·         Be mindful of the terms in your contract. Closely pay attention to the terms of the rent and its option. Any error on your rent could invalidate your chances of buying the home. Time to purchase? Knowing and understanding your option is not as simple as calling the seller and saying you are ready to purchase. You have to follow with the notice provision stated in the contract. Do not overlook the address where notice should be specified, the manner in which notice should be given or the time necessary for proper notice

.         Sample rent to own contracts A rent to own option can help buyers like you who is eager to have a place to call their own. This way you can keep your dream house from slipping away and it will help you become serious about cleaning your credit standing.