I think I’m one of the only in the real estate industry in the Santa Clarita Valley that has put time into writing about renting to own deals that come up from time to time.
This Renting to Own Real Estate, is it a SCAM”, article applies to the entire world. It does not have to be a property in the Santa Clarita Valley or in Southern California. – fyi…
They are marketed towards people that have lower than normal credit profiles and the low income earners. Maybe the attraction is the lack of needing to “qualify” to the bank’s standard. It could be the buyer has no credit profile. Maybe they came out of a short sale, foreclosure or another financial hardship and want to buy now instead of waiting for their credit to be healed.
The rent to own owner holds all the cards
The owner of the property on a Rent to Own listing is going to act as if they are the bank. They will be the bank and they are going to finance the home, at least temporarily.
They will be building, within contract, information related to how the rent to own home transaction will be structured.
Term – will equate to the length of time the owner is willing to finance the property until they make it mandatory for you to go to a “real bank” to get financing and buy the home at a pre negotiated price.
That is where some of the Santa Clarita Renting to Own scenarios are going to create a reason for you to keep renting until your credit profile improves where you can buy a home and get a mortgage loan from a Broker, Bank or Credit Union.
Rent to own down payments
In some cases, the owners of the rent to own properties are going to charge you extra monies a month so you can “save” for your downpayment in order to finance it with the owner.
In other cases, the owners are going to ask for that “down payment” upfront before the “rent to own” period starts.
I have also seen cases where “consignment” of personal items and property has been requested by the Renting to Own Owner.
The listing price and other items are going to depend on what is laid out in contract. If you are not reading the “rent to own” contract, you need to and have someone “Experienced” read it as well. Additionally, a Real Estate Attorney or seasoned Realtor should also be called into the review of the rent to own paperwork and contracts.
Verbal will not hold up later – be careful
Make sure you don’t think that verbal promises and communication will hold up in court. They will not, for the most part. You need to convert all verbal promises into email’s which you will send to the owner or their representative simply “making sure you understood the verbal discussion” that occurred.
Renting Versus Buying real estate
If you are wondering the answer to the question of whether you should rent or buy a home, here is a scenario if you were paying $2750 a month for rent and what would be the difference if you went out and had us find you a $500,000.00 home in Santa Clarita or in Southern California.
Be Safe – I’m Connor MacIvor and I’m ready to serve and protect your real estate needs.