Rent-to-Own as a Viable Selling Option in a Difficult Real Estate Market
You probably know that finding a buyer who wants to pay full asking price will be difficult if you’re trying to sell your home in this economy. Since terms can be dictated to a seller in most cases, it seems like today is a buyer’s market. Buyers can have their pick of properties from which to choose among all the foreclosures, as well.
In this market, some sellers are just relieved to be able to sell their home at all. Down market or not, some, on the other hand, really want to sell their home for what they believe it’s actually worth. There is another option to consider, if you’re the latter. It may make sense to offer your home as a rent-to-own option, as a result.
As a seller, you want to have as large a base of potential buyers as possible, and a rent-to-own option can widen the field for you. Tenants are the name of the game in rent-to-own options, imbuing you with responsibilities of an entirely different kind. Late rent payments or leaving a rental unit trashed are all horror stories you’ve probably heard. Many good tenants exist out there, though, who aspire to own a home, if presented with a feasible means of achieving their goal.
Enter: the rent-to-own option. If you want to sell your home for a set price, you can dictate that in a rent-to-own option, if it’s agreed to by the tenant. The rent-to-own contract usually holds a portion of the tenant’s rent aside on a monthly basis, and you can still retain ownership of the property during that time. A down payment on the home is what this withheld portion usually contributes to after your lease contract with the tenant has expired and the time comes for the actual home sale contract to be signed.
As a tenant, this is a great deal, because a portion of the rent paid each month goes toward actually owning the property at some point down the road. As a home seller, you have someone paying all or most of your mortgage each month. Since most rent-to-own contracts are binding, you can also be assured the tenant won’t back out of the agreement at a later point, although there are instances where a tenant might be able to walk away from the contract, such as if they cannot qualify for a loan. Overall, though, rent-to-own is a good option if you’re a seller who’s currently dissatisfied with the weak real estate market.
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