Let say your house has been up for sale for months, and you can no longer afford to make mortgage payments on both your old and new houses. You're desperate to sell but don't want to lose money. Now may be time to consider making your old WNY home a rent-to-own property.
For many, the rent-to-own home may be the best option. Also called a lease-to-own house, the process works this way Renters pay a certain amount each month to live in the house, and at the end of a set period -- generally within three years -- they have the option to buy the house. Each month of rent they pay is income for the seller, while a portion of it goes toward a down payment on eventually buying the home.
WNY Renters also have to pay a down payment and then a rent premium. The down payment fee is a set amount that the renter pays the seller. If, at the end of the lease period, the renter buys the house, the down payment fee is part that goes towards the house payment. If the renter doesn't buy the house, the option fee becomes income for the seller. Rent premiums are an amount slightly above the typical rent, with a portion of that money going toward a down payment.
I know in some cases this can be a good solution for a lot of WNY sellers and buyers when you choose to do creative financing. In many cases Buyers come along, but they don't have enough money saved up for a down payment, or their credit isn't good enough. How will you ever sell your home when the two isn’t jiving together? This is when you and your real estate agent get creative and find that broken link to get the two parties to the closing table ( win,win)
This is a valuable alternative for buyers who otherwise wouldn't have the credit score or money saved to acquire their own home. And the sellers, eager to relieve themselves of the burden of the old home, earn this money whether or not the house sells once the leasing period expires. If, at the end of the contract the renter can't or chooses not to buy the house, the seller keeps all of the money.
Both sellers and renters need to be very clear about the contract they draw up before they agree to this arrangement. Renting to own has advantages and disadvantages for both parties. For sellers you have the opportunity to sale a house that’s been on the market for so long quicker and paying two mortgages will stop. For The WNY Buyers you have a chance to own a home when you may not have been able to because of your credit but more importantly you will have the chance to build your income and credit rating over time. And if you are a home buyer looking to buy your Buffalo NY home please feel free to contact me and I can show you how and if you are a WNY/Buffalo NY homeowner who had their home on the market once before and no longer do because of discouragement please give me a call maybe this isn’t the only solution for you and if it is I can guide you through it.
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