| The housing market is still lagging and there are many | | | | They must be sure that they can meet contractual |
| houses for sale. Your home may have already been | | | | obligations and not be late with the rent. A rent-to-own |
| on the market longer than you expected. Perhaps you | | | | contract will include a clause that states that rental |
| even bought another house, expecting that the one | | | | credit toward the down payment will be voided if the |
| you owned would sell more quickly. At any rate, | | | | renter is late even one day. If a renter is getting $500 |
| perhaps it is time to consider whether to place the | | | | worth of credit toward the down payment, being late |
| home under a rent-to-own option. It is something | | | | four times during the period of the contract means |
| especially worth considering if you are paying two | | | | $2,000 less toward the down payment. |
| mortgages while trying to sell your old home. | | | | Renter/buyers also have to be concerned about the |
| For buyers, rent-to-own is an option to consider if they | | | | option fee, which is usually a percentage of the selling |
| cannot afford the payment to get into the home that | | | | price that was agreed upon in the rent-to-own |
| they want. Renting-to-own may help buyers get into | | | | contract. The renter/buyer will have to find a way to |
| the kind of house they want more quickly. Renters will | | | | come up with several thousand dollars at the end of |
| pay to live in the house with an option to buy, usually | | | | the contract to pay the option fee. This is very |
| within three years. In essence, part of the rent goes | | | | important because the seller will keep the credit as |
| for using the house during that time, and another | | | | income if the renter/buyers should decide to back out |
| portion goes toward the down payment to purchase | | | | of the contract. |
| the home. | | | | Sellers have the disadvantage of being back to square |
| There are advantages and disadvantages for both the | | | | one if the renters decide to back out of the |
| buyer and seller in a rent-to-own agreement. Both | | | | rent-to-own contract. Sellers often just want to be rid |
| parties must be aware that they are entering into a | | | | of the old house and the mortgage that goes along |
| binding agreement for a set period of time. This means | | | | with it. If the renter/buyers back out, sellers have to |
| that it will make no difference to either party whether | | | | look for another potential renter/buyer, or they have to |
| the market goes up or down during that time. If the | | | | go through the home selling process once again. This |
| house is worth less in three years, the buyer is | | | | means paying the mortgage on the old house until the |
| out-of-luck. If the house is worth more or if more is | | | | process is done, which is what they were trying to |
| offered for the house, then the seller is out-of-luck. | | | | avoid in the first place. In the end, if both parties are |
| These are things to think about before entering into a | | | | careful and savvy, the contract can be set up in such |
| rent-to-own contract. | | | | a way that both parties will benefit. |
| Renter/buyers must be keenly aware of their finances. | | | | |