So everyone paints a rosy picture of easy home ownership through lease to own home contracts. But this type of arrangement may not be right for everyone. If you are well on your way to saving enough money for a down payment on a home and if your credit is good, then it may be better to continue your savings plan for another year or so until you have enough to negotiate for the purchase of a home.
Buy using a qualified mortgage broker to help you connect with the best lender and find the lowest interest rates, having a mortgage preapproval in hand when home shopping also allows your bids to be taken seriously by the selling party and may very well result in a lower offer being accepted.
It is also said that the prime homes that sell easily do not appear on the lease-to-own home roster as the home owners along with their real estate agents typically desire as fast a closing as possible and do not want to become intertwined with the complexities of leasing a home before possibly selling it in exchange for a lease to own home option consideration.
Stereotypcially, this may leave the less desireable or harder to sell homes as candidates for rent to own home programs. This is often not the case though and really depends on the individual home owner and their financial goals and considerations. In any case, it is important before going through with a rent to own home contract, to have a home inspector go over the home and alert the potential home buyer to any problems with the home.
Also it is best to visit the home at different times of day to get a feel for the neighborhood and any noise or other issues that may make the home less desireable. Sometimes home sellers can not get bids on their homes because they have unrealistically priced them, or because they are located in a highly competitive area where new home builders may be offering incentives. There are many reasons why a particular home would have problems selling, so it is important to do your homework to uncover any issues before making an offer.
One advantage of a rent to own home agreement is that if problems surface during the rental portion of the contract, the lease option holder can simply walk away without having to complete the purchase in exchange for losing the lease option consideration.
Beware of renting a home without being able to make the rental payments, because this may be cause for not only forfeiting the lease option consideration but also to forfeit any rents paid. Typically rents are set somewhat higher than standard on a rent to own home or lease to own home contract because a portion is designated toward the eventual down payment.
A good rent to own home firm can put you in touch with a real estate lawyer that specializes in these situations and also consult with you on any caveats to rent to own homes.
Another pitfall is that many home repairs that would have been the reponsibility of the landlord are excluded in these contracts as the pride of ownership is passed to the new home owner during the rental portion of the agreement. Although major repairs are still the responsibility of the homeowner until the option to buy is executed, a home inspection previous to moving in can identify any other pitfalls that may cost thousands of dollars in repairs in addition to home rent payments.
With a relatively small down payment and deposit, renters can become owners, but it is highly suggested to incorporate the skills and advice of a seasoned Canadian lease to own home company such as Sandstone Management of Ontario, Canada (http://www.sandstonemanagement.ca).
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