Housing: Rent To Own? (real estate, foreclosure, rental)

[sparrowbone]

Hello,

Are there any opportunities to rent-to-own a home in the triangle or surrounding areas? My budget will allow me to pay up to $1200 a month for a home. I'd like a quiet area with a lot of trees and possibly a fenced yard. Are there websites or organizations that could aid in my search?

Thank you

[beckycat]

Check craigslist. There are some on there.

[jillthomas]

I would suggest speaking with a real estate agent. There is a way to enter the option of "rent to own" when entering a listing in the MLS. An agent will also be able to talk to you about what you need to get into a home. Most people who seek rent to own are trying to resolve an issue that prevents them simply purchasing a home (down payment, credit, etc). A good agent will be able to help you navigate those issues and locate the right home for you.

[MikeJaquish]

Be very careful with the agreements you make. Any documents should be drafted or reviewed by YOUR attorney to see what protections and rights, and liabilities, you may have.

There is no standard arrangement for "rent to own."

[saturnfan]

Originally Posted by MikeJaquish

Be very careful with the agreements you make. Any documents should be drafted or reviewed by YOUR attorney to see what protections and rights, and liabilities, you may have.

There is no standard arrangement for "rent to own."

Correct.

If the landlord loses the home to foreclosure, the "own" part of your rent was wasted.

[DanielChang]

Originally Posted by saturnfan

Correct.

If the landlord loses the home to foreclosure, the "own" part of your rent was wasted.

That, too, would depend on the contract. Definitely get a good real estate attorney who is familiar with the ins and outs of different rent-to-own scenarios to draw up your contracts.

[goat1of2]

And, in the category of advice you didn't ask for:

if the problem is that you can't save enough for a down payment, then home ownership is probably not for you. Many things that go wrong with a house cost thousands of dollars (roof, furnace, ac unit....). If you can't routinely save that kind of money, owning a home will be a sword of Damocles hanging above your poor sleepless head!

[JJingle]

Originally Posted by sparrowbone

Hello,

Are there any opportunities to rent-to-own a home in the triangle or surrounding areas? My budget will allow me to pay up to $1200 a month for a home. I'd like a quiet area with a lot of trees and possibly a fenced yard. Are there websites or organizations that could aid in my search?

Thank you

Be very, very careful with rent-to-own situations. I would echo the advice of others and say ensure that your attorney looks over all documents. Not sure how it works on the residential side of things, but on commercial properties it's not unusual for the property name to be switched to the future owner during the rent to own time frame. However, the bank will still take the property from you. It just blurs the issue a little and could buy you some time. I'm not an attorney.

[saturnfan]

Originally Posted by DanielChang

That, too, would depend on the contract. Definitely get a good real estate attorney who is familiar with the ins and outs of different rent-to-own scenarios to draw up your contracts.

If the landlord goes under, the contract would probably only be useful for toilet tissue.

Many foreclosed owners proceed to bankruptcy.

[rcarrillo]

Of course getting an attorney to review the contract as everyone said is a good idea... but also talk to a mortgage lender prior to entering into an agreement.

You need to have your exit strategy. An attorney can prepare you for the risks and losses, but they can not advise you much on how to qualify for the home in the future. There are a few items that should be included in the contract to make it easier to obtain a mortgage if/when you decide to buy.

You also should ALWAYS pay by check and keep photo copies of the cancelled checks to prove your rental history. There are a few other items to consider if you plan to use "rent credits" and to get yourself in the right place to buy.

I have plenty of clients that call 30-60 days before the lease expires. At that point, there isn't much we can do if they have credit, income or asset problems OR if the contract was not written correctly. They then get upset they need to lose the home and move somewhere new. Always plan ahead and make sure you are working with someone, even BEFORE you sign the contract.