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+--- Thread: What does this verbiage mean in regards to buying a home that is rent to own? (/thread-149903.html)
What does this verbiage mean in regards to buying a home that is rent to own? - Jennifer K - 04-28-2014 06:26 PM
I'm part of a Facebook group that lists homes for sale/rent. A woman listed the house "For Sale" and a guy asked her if she would rent it out & this was her response:
Yes, first and last month's rent as nonrefundable deposit with 12 month to buy term.
What does this mean exactly? Are they expecting the home to be paid off in only 1 year? If not how could you find out what the payments might be when the home costs $130,000? Thank you in advance for your time!
- A Hunch - 04-28-2014 06:33 PM
It means that they have 12 months to be able to finance the house in their own name. If they can't, the owner is free to sell it to someone else and it because a regular rental.
95% of rent to own properties never work out. It's a nightmare from both the buyer and seller side. Just some things to think about: if the seller can easily sell it they wouldn't bother with doing a rent to own, thus eliminating any liability of the property. And then the reverse, if the buyer can't buy it outright, why would you want him as a tenant.
Like in this case: The buyer can't buy it now. It's really unlikely he will qualify for a loan 12 months from now either.
- Bob - 04-28-2014 06:40 PM
It means that you must pay the 1st and last months rent and it is not refundable, that shouldn't be too hard to understand.. The person would have 12 months to decide if the WANT to buy it. That does not mean it has to be paid off in 12 months. At the point the individual decides to purchase it. They would need arrange their down payment and mortgage.