Many property sellers elect to rent-to-own because this option ensures a sale easier and faster. Also, tenants will take better care of the property if they are purchasing it. Some sellers do it because it is easy to scam someone with little consequences.
Not all states allow rent-to-own options on a property so you should ensure any contract you enter is legal in your state.
Check the seller's credit rating and ensure they are financially stable. Have a deed search done on the property to ensure there are no judgments against it. Have the home inspected.
You can possibly lose the home during the rent to own process due to:
There is a mortgage on the property and the seller fails to make payments, the home will be foreclosed on by the bank.
The seller incurs an unpaid tax liability and a tax lien is placed on the property.
The seller loses part or all of his interest in the home in a divorce or lawsuit.
Ensure the terms of your contract secure what you have paid in, and you will be able to recover some of your money if one of these should occur.
Have your attorney to review the contact and make suggestions as to any changes that should be made. Do not commit to anything without first consulting with your attorney.
I know someone who purchased a rent-to-own home successfully. I also know someone who jumped into an agreement quickly without first taking precautions. He had to move with only 30 days notice, lost everything he paid in, including money he spent for improvements.
In all reality, not all rent-to-own agreements lead to trouble, but most do simply because people jump into it too quickly without taking action to ensure security for themselves.
· 7 years ago