How Does Rent 2 Own Work?
First, it is important for you to know that there are numerous terms used to describe a “Rent 2 Own” transaction..
The most common are:
- Rent To Own
- Lease Purchase
- Lease To Own
- Lease Option
Basically, the way it works is you lease your property for 12-36 months with a traditional lease agreement, AND at the same time you also sign an option & purchase agreement to sell your home to your Rent 2 Own Buyer.
The Option & Purchase Agreement states the purchase price you and your Tenant Buyer agree to.
The agreement also details the period of time you, as the Seller, are willing to give your Rent 2 Own Buyer to purchase your home. This length of time is called the Option Period and it is usually 12-36 months, but can be longer based on what you negotiate. At this point, it is then the Buyer’s responsibility to qualify for a home mortgage to purchase the home before the expiration of the Option Period.
What If Tenant Buyer is Unable to Qualify In Time?
If your Buyer is unable to qualify to purchase the home before the end of the Option Period, one of two things usually occurs:
- The Option to Purchase Contract expires and you will no longer have the legal responsibility to sell your property. Further, your Rent 2 Own Buyer will forfeit any rent credits and the option fee paid to you.
- The Option to Agreement will offer you the ability to extend the agreement for a set period of time.
Rent Credits
Rent credits are common with a Rent 2 Own home.
This fee is generally credited towards the purchase price of the home.
Rent Credits
Rent credits are common with a Lease Purchase/ Rent to Own home.
It is the portion of rent that is credited toward the purchase price each month that the rent is paid on time.
The monthly rent credit amount is another one of those negotiable points between you and your Rent 2 Own Buyer.
Rent to Own Road Map
Using the Rent 2 Own approach is an extremely powerful strategy that anyone can use to sell their home, even in this poor market.
Many Buyers are searching for their dream home. Once you are serious about using the Rent 2 Own strategy to sell your home, merely click on our Rent 2 Own Buyer’s Rent to Own Road Map to understand the pathway that will bring you and your Buyer to a successful closing.