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NEW YORK (CNNMoney.com) -- With buyers scarce and financing tight, some home sellers are offering rent-to-buy options to potential buyers.
"an effective way of enabling people to buy who are having trouble arranging financing or coming up with down payments," said Lawrence Jacobson, a real estate attorney in Los Angeles.
"Is rent-to-own a scam?"
By Katherine Lewis of MSN Real Estate
"If you’re struggling either to sell a house or to qualify for a home mortgage, a lease-option or rent-to-own deal may sound tempting. In theory, both sides win. The seller gets a series of cash payments and the buyer immediately moves into his dream home, while gaining time to improve his credit score."
Families get a jump on homeownership
A lease-purchase agreement let David and Andrea Colby of Athens, N.Y., move their family of four into a brand-new house without forking over any cash. All 12 months of rent payments were credited to their down payment when they closed on the house last year.
"It was a good way for us to transition into it, to make sure we liked the home," David Colby said. "We had an extremely positive experience."
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I’m Just a Normal Person who was Struggling in this Economy just like Everyone Else…
But with Rent-to-Own I was able to Move into
My Dream House that I’ll Soon Own!
If you’re like me, you may be finding it hard to qualify for a home in this economy. I was looking for a home to buy for a while before my bank told me I wouldn’t qualify… and that I was about 2 years late because if I had applied back then I probably would have met the requirements.
A lot has changed in that time, and home-ownership is even harder than ever for lots of people just like me!
But, I was able to find a way where I could still move into my dream home… even with less than perfect credit, not a lot of money to put down, and no bank qualifying!
Click Here to See It
My name is Justin Williams, I am from
and this economy has really been getting on my nerves! Not only is it harder to get by, but bigger purchases (like cars, furniture, and of course real estate) seem almost impossible these days!
I have a decent job, in fact I’m a school-teacher, and if you know anyone in the business I’m sure they’d tell you it’s a lot of hard work and not nearly as much pay! But it’s always paid enough and my dedication to my students prevents me from ever doing anything different.
Now, I don’t mean to complain but it seemed like somebody with relatively decent income and stability should be able to afford a modest house in a modest area…
Apparently the banks think otherwise.
They told me that my credit wasn’t good enough. After going through a divorce and very nearly bankruptcy a year ago, I wasn’t really surprised.
But I thought to myself, just because I’ve been in financially hard times in the past, doesn’t mean I’m not responsible and ready to be a home-owner!
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I just needed a little help…
And thankfully, I did end up finding that help but it wasn’t easy.
After doing some research and talking to some people who knew what they are talking about, I realized that Rent-to-Own was probably my best option. The big problem was that I didn’t even really know what it is…
I mean… I knew basically what it was but then eventually all the real estate people started speaking in another language that I couldn’t even understand.
Plus, they told me all the things I needed… I needed to consolidate my debt, improve my credit scores, and get publicly available grant monies to help me with my down payment. The problem is, I didn’t know how to do ANY of those things!
All I wanted was somebody to hold my hand and show me how to do it. Tell me how to do EVERYTHING! Basically, I just wanted to know exactly what to do, I would do it.
The problem is, with my credit none of the real estate people would even give me the time of day! They told me that these things existed, but that’s it. Just enough info to make me dangerous!
After trying to work with a few of those different “online” people I realized that they wouldn’t be much help either!!!
I needed help navigating through this process that was completely foreign to me. |
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Then, I Came Across a Solution that had Everything I Needed!
Not only did they help me to find a Rent-to-Own house that works for me and my budget, they helped me through the ENTIRE process and gave me all the tools, resources, and knowledge that I needed along the way!
Plus, they were able to connect me to an online community of other people who were going through exactly what I was. By talking to other people who had been through the exact same thing I had, I got a lot more insight on the process.
Click Here to Try It
The first thing I learned was why everyone was telling me Rent-to-Own would be the best thing for me. Basically, by being a renter and paying rent on time like I do anyways, I can be building up credits towards the purchase of the house! When you combine that with the free money you can get from the government to purchase a house (I got $7,500) it makes it soooo much easier to qualify!
Plus, I was Able to Find the House I wanted to Buy & I Moved in Soon after the showing... even with less-than-perfect Credit!
Initially I was extremely skeptical. Like I mentioned earlier I had talked to a lot of people and hadn’t gotten much help. I could tell these guys were different right away though… by the way they talked about helping me with all the things I needed to do as much as they were talking about houses. That’s what I wanted… the straight and honest, no BS answers about how I could actually become a homeowner.
It took me about 2 weeks to gather all the information they told me to gather. I definitely could have done it much faster but was slowly moving through the program taking a “wait and see” approach.
I went through each step, and when I was done I knew exactly what I needed to do to improve my credit, apply for grants, consolidate my debt and even increase my income from home (without interrupting my full time job). They even showed me how to manage my stress caused by the frustration that had built up due to my experiences before I met them. Although a couple of their recommended resources seemed a bit out of the realm of getting me into a home, I figured out that they had a lot of people like me who just wanted to give up and needed to refocus on why we started this process in the first place. They were really tuned-in to their customers needs and I was thankful for all the resources they introduced me to.
When all was said and done, I got my Pre-Approval Certificate and was ready to start shopping for houses (which let me tell you, is by FAR the most fun part of the process). They even connected me with a home-seller who specializes in Rent-to-Own in my area!
Armed with the tools and knowledge they gave me, I was MUCH more confident in myself and my abilities to become a home-owner. Well, needless to say I found a home and have since moved in and so far am loving it! I still have some things to work on, but now I have something that I didn’t before… a clear cut plan, a sense of direction, a caring group of people to help if I ever get stuck and confidence in myself to make it work.
If I could do it, I’m sure you can too!
Sincerely,
Justin Williams
P.S. I in no way make any money or get anything for referring this company in my blog. I just do it because I don’t want others chasing their tails like I did for months before finding them. I wish I would have known sooner.
Click Here to Try It
P.P.S. I added a few testimonials for you from their website, where you'll find many more. I thought this might help you, as it helped give me more comfort knowing that their process worked for others before me. (hope it helps!)
"I didn't think this was going to work after the first few houses I wanted were taken. But my fiance told me to remain faithful and not to give up. After a little prayer the next house we saw was for us.Since then we've signed the rent to own agreements... Now we will be moving in just a few weeks. I'm really glad and excited about working with this company and will tell my friends and my church family. " R. Melson
"...thanks to the company we were able to buy all the way from Casper Wyoming to New York. When we first came accross the web site we didnt think it was real or could be this easy. Now have moved in and we love the home. Everything you said! Thank You. " J.S. Marsh |
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"Because the contract is typically written to close in 12 to 36 months, it gives buyers the chance to experience homes and neighborhoods without having to make major commitments."
"But the biggest reasons buyers opt for rent-to-buy deals are to build up down payments and to improve their credit profiles so obtaining a mortgage is easier."
Why rent-to-own is booming now
"The declining housing market and tougher lending standards are putting pressure on sellers to help buyers. One tactic is a lease-purchase agreement, under which the buyer rents for a set period of time before exercising an option to purchase the home. It's especially attractive for sellers in a down market because it locks in a price that otherwise could continue to fall."
"A number of sellers, particularly developers, are turning to that," said John McIlwain, senior fellow for housing at the Urban Land Institute. "It's definitely growing." The benefits of rent-to-own:
- The buyer can evaluate a neighborhood and property without making a 30-year commitment.
- Families can immediately enroll children in a desirable school district.
- The buyer can move right in despite credit problems, inability to document income or lack of financing.
- The seller gets a tenant with a vested interest in keeping up the property.
- The seller receives rental income to cover the mortgage, helpful in a slow real-estate market.
- The seller taps a broader market of potential buyers, instead of being limited to those with excellent credit and cash for a down payment.
- If a sale goes through, the seller may save on real-estate agent commissions.
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