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My realtor has had her home on the market for a bit, and they need to get out of it. They have had 3 offers, all have fallen through. She asked me if we want to rent to own it. The reason we cannot buy it is we thought our foreclosure was done in March, turns out on our CAIVRS report, it took 9 months for the lender to get $ from HUD, so we were just going to wait until spring to start looking again.
The house is exactly what I would like in a home. I have read much about this and know it's been around for a very long time.
I am not expert, but your case sounds like a suitable one for RTO. It will depend on the cost of rent payments, of course. And, whether you are confident you will be able to get a mortgage later on when you think you will be able to. Be sure you have a really well written contract, too, so the property can't be sold to someone else while you are living there and trying to find a lender. And of course, get receipts for all your rent payments and take pictures before you move in.
On my way out the door. So here's a couple of pointers.
You MUST pay fair market rent - ask your Realtor to document rent comps at the time you sign contract. Any money above fair market rent should be paid by separate check and preferably to a title company for your down payment. Rent may NOT be applied to down payment.
I like this method because you get to wear the dress before the prom. I don't like it because you are under a very lengthy contract, one that is well known for litigious activity.
You didn't say what state you're in, as it might be state specific if you're even able to do what you want to do without getting attorneys involved. In Texas, a real estate agent cannot do rent to own or lease to own. Only attorneys can, as a lease is not to be mentioned in a purchase contract and a purchase contract is not to be referenced in a lease.
Get with an attorney and see how it would work. How much rent would apply to price of home, if any. It's best to just keep them completely separate. Do a lease for the term of the lease, and then do a purchase contract for the purchase.
I am in Michigan, and I am pretty sure it's ok to do in my state, but I'm not 100% on that.
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