Foreclosed Rent-To-Own Homes: How Does this Work?

Thinking of buying a new home, but do not have the budget for it. Do not worry that you will not get the chance to achieve your goals because there is a sure-fire way to buy a house without drilling holes in savings. The recent increase for homes has paved the way for investors or sellers to offer a rent-to-own home option to home seekers all over the country.

This concept is perfect for those who are looking for great deals when it comes to home rates because they are strapped for cash. In addition, this gives the sellers a steady flow of money that can be used to pay off existing mortgage debts. Now, it is time to know how this concept really works and how it really helps both buyers and sellers of foreclosed homes.

  1. Sale rate or monthly rate – for someone who is interested to take advantage of the benefits of a rent to own home, it is important to know how much you are actually paying for the house. Usually, sellers or brokers would establish the current market value of the foreclosed home and then determine the monthly rate based on the actual selling price of the house. Moreover, since these are foreclosed homes, you can bargain with the seller and agree upon a fixed monthly rent that works for both parties.
  2. Initial payments – there are initial fees that you need to pay for as soon as a rate has been agreed upon. You may need to settle an option fee and of course a premium or initial rent for the house. The option fee is like a reservation fee that would be used as a deposit for the house in case you decide to purchase the foreclosed home in the end.
  3. Leasing period – there are terms and conditions that come with the lease or possibly buying the house. Just like any other house or flat for rent, there are certain conditions that should be met; for example: you are required to stay in the house for a certain length of time, and that if you wish to really purchase the house, you have to complete the payment within a specific number of months and years. When checking out a foreclosed rent to own space, make sure that you are amenable with the leasing period to avoid any payment issues.
  4. Leasing Agreement – this is the contract that you and the seller need to sign to seal the deal. The agreement contains all the conditions that apply to the lease and the purchase of the house. Now once you have this, review every item included in the contract, especially the ones in fine print to avoid misunderstandings and other gray areas.

Rent-to-own homes are easy to find, just check your local foreclosure listings and for sure, you will find the one that suits all your requirements. This budget friendly option can give you many benefits, not to mention, take you one-step closer to buying your dream home.

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