Buyers and Sellers Find Benefits With Rent-To-Own Home Sales
As more consumers pursue the American dream – and more sellers look for alternative ways to offload their properties – the concept of rent-to-own home sales has grown in popularity. Though it comes as a surprise to some, this method of property sale offers benefits for both buyers and sellers.
Buyers who are drawn to a rent-to-own arrangement are likely looking for at least one of three main benefits. First, it allows for an opportunity to test-drive home ownership, as well as the particular home in question and even the surrounding neighborhood or school system. Second, rent-to-own also provides some buyers with needed time to repair their credit in order to qualify for a mortgage loan at the end of the lease period. Finally, rent-to-own can also help a buyer build equity in the home – in the form of monthly option credits paid alongside rent – before ever signing a purchase agreement.
For a seller who prefers a private sale, rather than working with a realtor, rent-to-own can also be ideal. Not only can the seller control the process, but the home won’t be languishing on the market for months while sitting empty. Instead, the home can be used to earn money for the owner in the form of monthly rent and option credits.
The topic of option credits brings up another tremendous benefit for the seller, too. Rent-to-own buyers typically pay a monthly option credit as part of their rent, designed to protect their option to purchase the home when the lease period ends. Usually, the money goes toward the buyer’s eventual down payment. However, if the prospective buyer exercises their right not to purchase the home at the end of the lease period, the seller keeps the option credit funds.
Rent-to-own may not be for everyone, but it presents opportunities for buyers and sellers looking to take advantage of the above-mentioned benefits this unusual tool offers.
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