Don’t disagree but it’s obviously offered in the market place commonly.
I’m not too concerned with the seller. I was hoping for advice for my brother who would be the buyer.
The seller’s perspective is important because they are probably not going to want to do this. So the only way to convince them to do it is likely to give them a bunch of extra money. So yeah it will probably be expensive.
Keed
I don’t understand why you are focussed on this. It’s a common type of sale in the marketplace. A quick google shows hundreds for sale in Oregon.
The issue is not if they can rent to own. They can. They question is do they want too.
Cheers
They already got the seller to agree to rent to own? What the hell is the question to us then? The question is all up to them — is the extra money they will spend worth it to them. If yes, then do it. If not then don’t.
I wouldn’t buy anything or rent to own anything or whatever right now. The odds of the absolute bottom of the real estate market falling out in the next 12 months has to be like 30%.
Rent and sort it out when we have a clearer picture. Literally no one on earth knows how his will shake out.
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Clovis,
I think it’ll be difficult for an owner that has their house up for sale in a traditional manner to be convinced to do a rent-to-own option on it. Owners that are willing to do that usually put their house on the market that way. I think it’ll be difficult to convince an owner that has their house on the market to do a rent to own after they’ve already listed it. It’s doubly difficult because as a buyer you really don’t have access to the seller, only their realtor.
Fair point in terms of getting something cheaper. Worth considering.
As for the value falling that’s not a huge issue if it ends up being the place they live in for 40 years.
I don’t know your family obviously but it sounds like they mostly moved there for work. If it is a destination living location for them then my opinion changes and I agree it doesn’t matter much.
Ya sorry maybe that wasn’t clear. He has moved all over with his company and took this job as it where they want to retire. That being said he is only 43.
Our mega lowball offer was basically accepted and we are moving forward. We plan to live in this house for decades in a rapidly growing city, have a large emergency fund and really want to move. Rentals are basically non existent in this sub market.
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Congrats Riverman
Everything I’ve ever heard about rent to own real estate involves the owner scamming poor people. It’s usually offered as an alternative to conventional financing for those who can’t qualify, with contract language hugely in favor of the owner. One late payment and you’re evicted with no money back and no equity stake.
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I’ve never heard of it in Australia (really robust property market 2015-2019) and I’ve owned, sold and rented out properties during this time working extensively with agents.
I’ve only heard of it as a way to exploit poor minorities. [Wrote this before I read the post above. I probably heard about it from the Ta-Nehisi article mentioned by Goofy.] Like if they miss a payment, they lose equity. Also, it isn’t the perfect house if they don’t know what their long term situation is, and the housing market will decline.
Look at it as 2 transactions. A rental, and a purchase option. The option to buy a house 6 months from now (or whenever) at today’s price. So in the best of times it’s more expensive. These days, lol.
Also even in a normal market, it costs a lot to sell a house. Unless he’s definitely going to be there for the next maybe 5 years then renting is likely marginally better financially.
Also, look, he’s got one foot out the door, buying a house is a bad idea when that’s the case.
USA records highest one-day death total? Great day for the markets!
I wonder if the DJIA will dip below 12k?
Well, not exactly, but pretty much.
Land contracts are usually a scam. The only way it’s worth the risk for a seller is if the home is “sold” at a huge premium and your monthly rent is likely to be 2x+ what it otherwise would be, but that money on top of market rent is put toward the purchase price.
If they miss a payment or break the lease terms in any way, the contract is void and the seller keeps the money paid so far.
The buyer usually also has to pay all the legal fees up front.
If it’s a nice home and COVID-19 breaks the real estate market in the next 12 months, that seller could be out far more in home value than whatever extra rent he’s collected.
I wouldn’t call it a “common” transaction.
Agree.
Ultimately it seems absurd to me that we let people buy futures contracts who have no means of fulfilling them.
Heh I never thought of that, yeah it is weird. I take rolling for granted because there’s always liquidity (and we roll a week or more before expiration), but if suddenly nobody wanted to buy, I guess a trader would be forced to take delivery to their house or something lol.
IRL there’s always a price at which somebody will buy, even if negative. But what if the trader doesn’t have enough funds in their account to take the loss required to liquidate? Then it’s either take delivery, or the broker will have to close their position at a price that puts their account into the negatives, so the trader would be in debt to the broker.
Peoples brokerage accounts go negative sometimes with levered investments. Margin Call isn’t just a movie.
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