Rent-to-Own, Your Lifesaver in a Drowning Market

Here are some reasons rent-to-own can be beneficial for you:

• Higher Purchase Price – Rent-to-own sales typically command a price premium over traditional saes.  The buyer is paying extra for the flexibility he recieves by not having to do an outright purchase immediately
• Higher Rent – You may be able to charge more for monthly rent in a rent-to-own than you would for just a straight rental.
• Cash Flow – If your monthly payments are less than the monthly rent, the difference goes into your pocket.
• Option Fee – This upfront fee paid to you by your buyer is what secures the purchase price down the road.  If the buyer closes on the home, it would be applied towards the purchase price.  If the buyer elects to not purchase the home, the option fee is forfeited and still remains yours.  Eitehr way you win.  If you were to just rent the home, then the tenant would put down a security deposit.  The option fee is different than a security deposit.  A security deposit is owned by the tenant and can’t be used by the owner, except for repairing damages, unpaid rent and other provisions as mandated under state laws.

 

 

Excerpt from Rent-To-Sell: Your Hands on Guide to SELL Your Home When Buyers are Scarce.

Script for Calling a Realtor about Rent-to-Own and Lease Options, Part 2

As promised, the remainder of the "Script for Calling a Realtor about Rent-to-Own and Lease Options".

Use this follow-up sentence on any of the

statements below where it applies.  You always

want to dig to see what else they have that might

work for you.

 

Sally may also respond to the rent-to-own question like this:

“No, they need to sell now and wouldn’t be interested

in that.”

 

If this is the case, jump right to the question where you ask if she has any other listings that might work.  You will need to know your price range and what you can afford; as she will probably ask you about this (we covered this in Chapter 3).

“I’m not sure; I would have to check with them.”

 

If this is the response, encourage the agent to talk with her clients.  Remind her that you are looking for a rent-to-own home in that area and her commission would be paid in full when you buy the home.

“What are you talking about?”

 

Not every agent knows what rent-to-own is so you need to give them a brief explanation.  Be prepared to tell them something like, “Well I would rent the home and buy it later.” Keep it simple.

“Why do you need a rent-to-own?”

 

Most likely it’s because you can’t get a mortgage right now or because you don’t want to get a mortgage right now.  You best answer is to simply tell her that a mortgage won’t work for you now, but you do want to get into a home now and ask her if this home or another listing of heres might be a candidate for rent-to-own.  Keep your answer brief, but do be honest.  If you had a bankruptcy or a foreclosure, it will be important that they know that.  Don’t spring that on them later.  If you had perfect credit, you probably wouldn’t need a rent-to-own in the first place.

Excerpt taken from Rent-To-Buy: Your Hands-on Guide to BUY Your Home When Mortgage Lending is Tight, Chapter 5, Pages 68-71.