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You’ve just bought the Metro Detroit home of your dreams, signed the contract and packed the moving van — you’re all set, right? Not if you haven’t sold your current home first. So you put it on the market and you wait. And wait. And wait. In many cities where it makes more financial sense to rent than own, buyers may simply not be interested. In others, buyers do come along, but they don’t have enough money saved for a down payment or their credit isn’t good enough. How will you ever sell this house? Call now to rent to own homes Detroit 248 825-3382.
For many, Detroit rent-to-own home may be the best option. Also called a lease-to-own house, the process works similarly to a car lease: 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 to eventually buy the house.
Both renters and sellers 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. Sellers who have already bought a new house will have relief from paying two mortgages at once, and in a slow housing market with many homes for sale, this may be their best option. Buyers who can’t yet afford a house may be able to get one more quickly. Rent to own Michigan homes call 248 825-3382
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Process Involved in Detroit Rent to own homes
So your house has been up for sale for months, and you can no longer afford to make martgage payemtns on both your old and new homes. You’re desperate to sell but don’t want to lose money. Now may be time to consider making your old home a rent-to-own property.
Before entering into an agreement, sellers have to decide the sale price and rent they’ll charge for the house. Both amounts are subject to negotiation, just as a regular sale would be. But sellers and buyers need to remember that once they sign an agreement, the sale price of the house is locked in until the end of their rental term, between one and three years. Even if other housing prices rise or fall during that time, the original agreed-upon price is final. Your dream rent to own homes Detroit are available call 248 825-3382 now.
Renters also have to pay an option fee and then a rent premium. The option 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 option fee becomes part of the down 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.
Here’s a typical example: The house is worth $200,000, and typical rent would be $1,000 a month. Someone who’s renting to own might pay $1,200 a month in rent and then receive a $200 rent credit each month. Add the option fee, in this case $5,000. On a three-year lease, the renter would earn $7,200 in rent credits. Adding the earned rental credits to the option fee, the renter has accumulated $12,200 for a down payment. Rent to own homesDetroit MI call today 248 825-3382.
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 the money.
As with any business contract, there are mutual risks and disadvantages involved for both parties. What if someone else wants to purchase the house for a higher price than originally negotiated? Who’s responsible for fixing the leaky roof in the middle of the night? Read on to discover the advantages and disadvantages for each side.
Risks and Benefits to Buyers – Michigan rent to own homes 248 825-3382 now!
For many people, a home will be the biggest purchase they ever make. Both buyers and sellers should carefully weigh their options before agreeing to any binding contract. Let’s look at some advantages and disadvantages for buyers:
Although the renter will lose the option fee and all their rent credit money, that amount will be much less than if the renter had bought the house outright and tried to leave it later. For more homes for rent to own homes Detroit MI.
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