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Rent To Own Homes Explained
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| If you desire to own your own home but are unable to secure
conventional financing today, leasing a home with an option to buy may
be your best option. A lease purchase can make your rent money work for
you instead of making your landlord rich. Typically rent to own homes
offer rent credits that reduce the final purchase price!
Here's how it works:
A home is made available via a standard lease with one important
addition. Included is an option to purchase that home at a specified
price over a specified time period (usually one or two years). In order
to acquire that option, the renter/buyer must pay a one time, NON
REFUNDABLE, fee called the option consideration. The exact amount is
negotiable, but it is usually ranges from 2.5 to 7% of the purchase
price. A fair contract will credit the buyer 100% of that option
consideration upon closing of the sale. Furthermore a negotiated
percentage of all rent payments should be applied toward the purchase
price of the home. Some typical terms and conditions one might expect
to find in a contract follows:
1. In order to receive a rent credit of 50%, time is of the essence.
You MUST pay your rent on or BEFORE the due date of your lease
(typically the 1st of the month). This means it must be received by the
lessor (landlord) on or before the due date. Any payment received after
the due date will result in a 0% rent credit for that month, a late fee
may apply and you will not be building any equity.
2. Maintenance is the responsibility of the Tenant Buyer. You are now
renting to own and homeownership requires maintenance. This includes
things like broken windows from stones or baseballs, clogged drains,
peeling paint, broken appliances, burnt out bulbs, lawn work/snow
removal, etc. If any major repairs are required to ensure habitability,
the owner remains responsible.
3. You need to have Option Consideration. Option Consideration is
typically 2.5% to 7% of the purchase price of the home. It is a
non-refundable payment, of which 100% is credited toward the purchase
price, which binds the lease purchase contract.
Here's an example transaction:
We have a nice 3 bedroom, 1 bath single family home located in a near
west suburb of Chicago in a great neighborhood with good schools and a
strong community. It has been freshly painted, cleaned, and is ready to
move in. The purchase price will be $215,000. Monthly rent payments
will be $1,500 and you will receive a 50% rent credit ($750 per month).
You need between 2.5% and 7% in up front Option Consideration. Let's
say your budget allows for $6,000 for Option Consideration. This
equates to approximately 2.8% ($6,000/215,000). You will also need
$1,500 for the first months rent for a total initial payment of $7,500.
Please note: Option consideration is not a security deposit. It is a
non refundable payment toward the purchase price and is 100% credited
toward reducing the price of the home. Now suppose you paid all your
monthly rent payments on or before the due date and you choose to buy
the rent to own home at the end of the 12 month lease purchase
contract. You will have $15,000 in equity before you even own the home!
Here's the math:
Lease Purchase Price - $215,000
Less: Option Consideration paid at lease signing - $6,000
Less: 50% rent credit of $750/m * 12 months - $9,000
Net Purchase Price after credits - $200,000
You started with $6,000 and by paying your rent on time; your equity
position grew 150% (another $9,000) for a total of $15,000 with 12
months. Not a bad deal! Many people find it nearly impossible to save
$9,000 in a year with all the costs of living constantly on the rise.
What's the catch?
Now you may be thinking, "OK, what's the catch? This sounds too good to
be true."
Answer, there is no catch, but there is RISK! Understand and follow
your contract to avoid any potential penalties.
There are many possible reasons a landlord/seller may want to enter
into a rent to own agreement. Some reasons may be:
Needs to maintain ownership for at least one year for tax purposes.
Unable to get a fair price due to local conditions.
Tired of performing minor maintenance.
Furthermore, when one sells a home through a realty service, a
commission of 5-7% is typically paid. In the example above, this can
cost more than the rent credit. Since realtors are usually not involved
with this type of transaction, there is no commission and the landlord
can afford to pass along the savings to tenant/buyer in the form of
rent credits.
Also, when the Tenant becomes the Tenant Buyer (via rent to own), there
is an immediate sense of pride in ownership. Tenant Buyers add value to
the community. They take care of their future property, make
improvements, and feel good knowing their rent money is working for
them (reducing the purchase price) rather than just making their
Landlord rich.
There are also many advantages for the renter:
Build equity toward home ownership.
No bank or finance company involvement.
Poor credit history may not be an issue.
Learn more at http://www.jscinvestments.com/. You can also place FREE
wanted ads and FREE homes available ads for anywhere in the United
States. There is no obligation whatsoever.
| |
|
| "JSC" <bpappas@rmminc.net> wrote in message
news:1148660777.708844.26770@u72g2000cwu.googlegroups.com...
> If you desire to own your own home but are unable to secure
> conventional financing today,
Last night on TV a nice man was telling me how I can be a REAL ESTATE
INVESTOR even if i cannot secure conventional financing. I will be able to
buy not just one home but many homes, with NO MONEY DOWN. And I will get
rich. I think I am going to do business with that company, because you are
making me pay a big deposit up front before I can get into your program.
| |
| JSC Rent To Own Homes 2006-05-26, 6:21 pm |
| I saw that guy too. He offers a lot more than real estate. For example,
he is offering a bridge in Brooklyn that looks pretty good to me.
| |
|
| "JSC Rent To Own Homes" <bpappas@rmminc.net> wrote in message
news:1148678294.828267.147710@j55g2000cwa.googlegroups.com...
>I saw that guy too. He offers a lot more than real estate. For example,
> he is offering a bridge in Brooklyn that looks pretty good to me.
Yes, I guess I should be suspicious about him. I guess I will opt for your
program after all. But the down payment.
| |
|
| "JSC Rent To Own Homes" <bpappas@rmminc.net> wrote in message
news:1148678294.828267.147710@j55g2000cwa.googlegroups.com...
>I saw that guy too. He offers a lot more than real estate. For example,
> he is offering a bridge in Brooklyn that looks pretty good to me.
I have it all figured out now, because I got some good financial advice in
another newsgroup. I am going to go to the race track and play the horses to
get the down payment.
| |
| JSC Rent To Own Homes 2006-05-26, 8:21 pm |
| >I have it all figured out now, because I got some good financial advice in
>another newsgroup. I am going to go to the race track and play the horses to
>get the down payment.
Now you're talking. Put a c-note on # 4 in the 5th to win. You can mail
me my winnings. If it loses, I'll mail you a check. I know the value of
newsgroup articles because it's similar to where I get all my investing
advice - Yahoo forums.
Seriously, all I did was to post an article trying to explain a concept
and get some traffic to my website. You say "your program". I don't
have a program. Anyone (in the U.S.) can post a free ad - buy or sell.
I'm not trying to get anyone into any sort of deal. As the website
says, my real estate activities are limited to the Chicagoland area.
| |
| John Mianowski 2006-05-26, 10:21 pm |
|
Don wrote:
> "JSC Rent To Own Homes" <bpappas@rmminc.net> wrote in message
> news:1148678294.828267.147710@j55g2000cwa.googlegroups.com...
>
>
> I have it all figured out now, because I got some good financial advice in
> another newsgroup. I am going to go to the race track and play the horses to
> get the down payment.
I've got better than that. I've got a Nigerian prince that's sending
me $600,000 any day now...
JM
| |
| FullTiltFullTime054 2006-05-26, 10:21 pm |
|
"John Mianowski" <spamfree@skytex.net> wrote in message
news:1148689926.236235.131640@g10g2000cwb.googlegroups.com...
>
> Don wrote:
in[color=darkred]
horses to[color=darkred]
>
> I've got better than that. I've got a Nigerian prince that's sending
> me $600,000 any day now...
>
> JM
>
Wow, you too!
| |
|
| "John Mianowski" <spamfree@skytex.net> wrote in message
news:1148689926.236235.131640@g10g2000cwb.googlegroups.com...
> I've got better than that. I've got a Nigerian prince that's sending
> me $600,000 any day now...
Let me guess. You bought a rent-to-own house in Nigeria and sold it at a
profit.
| |
| Phonedude 2006-05-27, 1:21 pm |
|
"Don" <dwzimm@telus.net> wrote in message
news:GzOdg.35665$Qq.350@clgrps12...
> "John Mianowski" <spamfree@skytex.net> wrote in message
> news:1148689926.236235.131640@g10g2000cwb.googlegroups.com...
>
>
> Let me guess. You bought a rent-to-own house in Nigeria and sold it at a
> profit.
No, that's just for the option. (Which, by the way, is non-refundable and
does *not* apply to the purchase price in many cases.)
PD
| |
| JSC Rent To Own Homes 2006-05-27, 4:21 pm |
|
Phonedude wrote:
> "Don" <dwzimm@telus.net> wrote in message
> news:GzOdg.35665$Qq.350@clgrps12...
>
> No, that's just for the option. (Which, by the way, is non-refundable and
> does *not* apply to the purchase price in many cases.)
>
> PD
I'm glad you guys explained how so many Nigerians got so wealthy.
Hey PD, if the option consideration does not apply toward the purchase
price of the house, then the prospective tenant/buyer ought to move on.
Applying 100% of the option consideration toward the purchase price is,
imo, at the heart of a FAIR RTO deal.
| |
| Phonedude 2006-05-28, 2:21 pm |
|
"JSC Rent To Own Homes" <bpappas@rmminc.net> wrote in message
news:1148756244.631828.47800@38g2000cwa.googlegroups.com...
>
> Phonedude wrote:
>
> I'm glad you guys explained how so many Nigerians got so wealthy.
>
> Hey PD, if the option consideration does not apply toward the purchase
> price of the house, then the prospective tenant/buyer ought to move on.
> Applying 100% of the option consideration toward the purchase price is,
> imo, at the heart of a FAIR RTO deal.
Maybe, maybe not. An option gives you the right to buy tomorrow for today's
price. That's worth cash all by itself. Personally, if I were a seller, I
would not accept an option to buy for less than at least one half of the
expected appreciation between now and the option expiration. For example,
if I were selling a house that was worth $100,000 today I would not sell an
option that expires in a year for less than $5,000 if I expected the
property to appreciate 10% in the year.
Think about it -- you're putting a house under contract at today's price,
but not buying it until next year. The seller gets screwed. Not if I'm
representing him. So either make your contract for $110,000 and pay in a
year, or pay cash for the option and don't expect it to apply to the price.
PD
>
| |
|
| Hi JSC,
Are you the owner of the JSC site?
I used to use that site last year to post all my Rent To Own homes in,
and was wondering if you still need to email you the pics of the houses
to post on your site? Also, to delete our ads/pics, do we still need to
send you an email as well for that? Hopefully all this has been
improved by now where we can control our ads, if so, please let me know
:-)
Thank You,
Missy
| |
| The Shadow 2006-05-29, 6:21 pm |
| so if the house is expected to decrease in price would the owner give an
option payment to the tenant buyer?
Phonedude wrote:
> "JSC Rent To Own Homes" <bpappas@rmminc.net> wrote in message
> news:1148756244.631828.47800@38g2000cwa.googlegroups.com...
>
>
>
> Maybe, maybe not. An option gives you the right to buy tomorrow for today's
> price. That's worth cash all by itself. Personally, if I were a seller, I
> would not accept an option to buy for less than at least one half of the
> expected appreciation between now and the option expiration. For example,
> if I were selling a house that was worth $100,000 today I would not sell an
> option that expires in a year for less than $5,000 if I expected the
> property to appreciate 10% in the year.
>
> Think about it -- you're putting a house under contract at today's price,
> but not buying it until next year. The seller gets screwed. Not if I'm
> representing him. So either make your contract for $110,000 and pay in a
> year, or pay cash for the option and don't expect it to apply to the price.
>
> PD
>
>
>
| |
| Phonedude 2006-05-30, 9:21 am |
|
"The Shadow" <a@b.com> wrote in message news:W_Ieg.46$XB5.6@fe09.lga...
> so if the house is expected to decrease in price would the owner give an
> option payment to the tenant buyer?
Real estate is never expected to decline in value. Pretty simple really,
but I think you knew that anyway. Another way to look at this issue is that
while there are several potential reasons for a lease option, they almost
always serve the buyer -- and inconvenience the seller. There is a basic
inequality to this equation that is best resolved by a cash payment from the
buyer to the seller. The seller is paid for his time in waiting for the
cash from the purchase, and the seller is paid for his inconvenience in
dealing with a tenant for a year (or whatever time period) instead of a
clean simple closing resulting in a check.
Having the option cost apply to the price does not balance the equation --
whether or not the house increases in value.
PD
[color=darkred]
>
> Phonedude wrote:
| |
| John Mianowski 2006-05-31, 12:21 am |
|
Phonedude wrote:
> "The Shadow" <a@b.com> wrote in message news:W_Ieg.46$XB5.6@fe09.lga...
>
> Real estate is never expected to decline in value.
Improvements (i.e. houses, etc.) DO depreciate. Like anything else
that's built, they have a useful lifespan, & at the end of their
lifespan their value is 0. Assuming that they cost something more than
0 to build in the 1st place, this represents a decline in value.
Improvements' lifespans can be extended with maintenance. Most
property appreciates at a rate faster than its improvements depreciate,
but that's not necessarily true in all cases. There are some
properties where the "improvements" actually detract from the value,
like when they've been neglected to the point where somebody would have
to pay to have them knocked down.
JM
[color=darkred]
> Pretty simple really,
> but I think you knew that anyway. Another way to look at this issue is that
> while there are several potential reasons for a lease option, they almost
> always serve the buyer -- and inconvenience the seller. There is a basic
> inequality to this equation that is best resolved by a cash payment from the
> buyer to the seller. The seller is paid for his time in waiting for the
> cash from the purchase, and the seller is paid for his inconvenience in
> dealing with a tenant for a year (or whatever time period) instead of a
> clean simple closing resulting in a check.
>
> Having the option cost apply to the price does not balance the equation --
> whether or not the house increases in value.
>
> PD
>
>
>
| |
| Steve Foley 2006-05-31, 10:21 am |
| "JSC" <bpappas@rmminc.net> wrote in message
news:1148660777.708844.26770@u72g2000cwu.googlegroups.com...
> If you desire to own your own home but are unable to secure
> conventional financing today, leasing a home with an option to buy may
> be your best option. A lease purchase can make your rent money work for
> you instead of making your landlord rich. Typically rent to own homes
> offer rent credits that reduce the final purchase price!
>
> Here's how it works:
One of our local slumlords got caught holding a bunch of property in the mid
90s when the values had dropped drastically (my single family home lost
almost 50% of it's value).
He ended up using a rent-a-center model to profit off his properties. He
would offer financing to poor credit risks at abnormally high interest
rates. As soon as they missed a payment, he would foreclose and evict them,
but in the meantime, he had collected more in 'payments' then he could have
if he had rented them.
| |
| doubletfan 2006-06-08, 2:21 pm |
| Let me say, first, that y'all are really funny, really, it put a step in my
day. Secondly, I've been thinking about using the rent to buy method and
have read quite a bit on it, but I have never had it explained so clearly
and intelligently as you did JSC - thanks for the post.
I do have question - people used to the "deed to buy" where, somehow, I
understand that the rent/buyers were considered owners and could refinance
instead of a straight out purchase, at the end of their rent/buy, and that
was the real magic bullet for them, because it was easier for a lender to
make the deal work with their subpar credit. Is is working the same way
now? Someone said you could file the contract with the County and that
would put a lien against the property which the bank would accept as some
proof of ownership? But that doesn't sound right, and then you'd have to
get that lien off if the deal fell through.
Brian.
"JSC" <bpappas@rmminc.net> wrote in message
news:1148660777.708844.26770@u72g2000cwu.googlegroups.com...
> If you desire to own your own home but are unable to secure
> conventional financing today, leasing a home with an option to buy may
> be your best option. A lease purchase can make your rent money work for
> you instead of making your landlord rich. Typically rent to own homes
> offer rent credits that reduce the final purchase price!
>
> Here's how it works:
>
> A home is made available via a standard lease with one important
> addition. Included is an option to purchase that home at a specified
> price over a specified time period (usually one or two years). In order
> to acquire that option, the renter/buyer must pay a one time, NON
> REFUNDABLE, fee called the option consideration. The exact amount is
> negotiable, but it is usually ranges from 2.5 to 7% of the purchase
> price. A fair contract will credit the buyer 100% of that option
> consideration upon closing of the sale. Furthermore a negotiated
> percentage of all rent payments should be applied toward the purchase
> price of the home. Some typical terms and conditions one might expect
> to find in a contract follows:
>
> 1. In order to receive a rent credit of 50%, time is of the essence.
> You MUST pay your rent on or BEFORE the due date of your lease
> (typically the 1st of the month). This means it must be received by the
> lessor (landlord) on or before the due date. Any payment received after
> the due date will result in a 0% rent credit for that month, a late fee
> may apply and you will not be building any equity.
>
> 2. Maintenance is the responsibility of the Tenant Buyer. You are now
> renting to own and homeownership requires maintenance. This includes
> things like broken windows from stones or baseballs, clogged drains,
> peeling paint, broken appliances, burnt out bulbs, lawn work/snow
> removal, etc. If any major repairs are required to ensure habitability,
> the owner remains responsible.
>
> 3. You need to have Option Consideration. Option Consideration is
> typically 2.5% to 7% of the purchase price of the home. It is a
> non-refundable payment, of which 100% is credited toward the purchase
> price, which binds the lease purchase contract.
>
> Here's an example transaction:
>
> We have a nice 3 bedroom, 1 bath single family home located in a near
> west suburb of Chicago in a great neighborhood with good schools and a
> strong community. It has been freshly painted, cleaned, and is ready to
> move in. The purchase price will be $215,000. Monthly rent payments
> will be $1,500 and you will receive a 50% rent credit ($750 per month).
> You need between 2.5% and 7% in up front Option Consideration. Let's
> say your budget allows for $6,000 for Option Consideration. This
> equates to approximately 2.8% ($6,000/215,000). You will also need
> $1,500 for the first months rent for a total initial payment of $7,500.
>
>
> Please note: Option consideration is not a security deposit. It is a
> non refundable payment toward the purchase price and is 100% credited
> toward reducing the price of the home. Now suppose you paid all your
> monthly rent payments on or before the due date and you choose to buy
> the rent to own home at the end of the 12 month lease purchase
> contract. You will have $15,000 in equity before you even own the home!
> Here's the math:
>
> Lease Purchase Price - $215,000
> Less: Option Consideration paid at lease signing - $6,000
> Less: 50% rent credit of $750/m * 12 months - $9,000
> Net Purchase Price after credits - $200,000
>
> You started with $6,000 and by paying your rent on time; your equity
> position grew 150% (another $9,000) for a total of $15,000 with 12
> months. Not a bad deal! Many people find it nearly impossible to save
> $9,000 in a year with all the costs of living constantly on the rise.
>
> What's the catch?
>
> Now you may be thinking, "OK, what's the catch? This sounds too good to
> be true."
>
> Answer, there is no catch, but there is RISK! Understand and follow
> your contract to avoid any potential penalties.
>
> There are many possible reasons a landlord/seller may want to enter
> into a rent to own agreement. Some reasons may be:
>
> Needs to maintain ownership for at least one year for tax purposes.
> Unable to get a fair price due to local conditions.
> Tired of performing minor maintenance.
>
> Furthermore, when one sells a home through a realty service, a
> commission of 5-7% is typically paid. In the example above, this can
> cost more than the rent credit. Since realtors are usually not involved
> with this type of transaction, there is no commission and the landlord
> can afford to pass along the savings to tenant/buyer in the form of
> rent credits.
>
> Also, when the Tenant becomes the Tenant Buyer (via rent to own), there
> is an immediate sense of pride in ownership. Tenant Buyers add value to
> the community. They take care of their future property, make
> improvements, and feel good knowing their rent money is working for
> them (reducing the purchase price) rather than just making their
> Landlord rich.
>
> There are also many advantages for the renter:
>
> Build equity toward home ownership.
> No bank or finance company involvement.
> Poor credit history may not be an issue.
>
> Learn more at http://www.jscinvestments.com/. You can also place FREE
> wanted ads and FREE homes available ads for anywhere in the United
> States. There is no obligation whatsoever.
>
| |
| JSC Rent To Own Homes 2006-06-16, 9:42 am |
| doubletfan wrote:
> I do have question - people used to the "deed to buy" where, somehow, I
> understand that the rent/buyers were considered owners and could refinance
> instead of a straight out purchase, at the end of their rent/buy, and that
> was the real magic bullet for them, because it was easier for a lender to
> make the deal work with their subpar credit. Is is working the same way
> now? Someone said you could file the contract with the County and that
> would put a lien against the property which the bank would accept as some
> proof of ownership? But that doesn't sound right, and then you'd have to
> get that lien off if the deal fell through.
>
> Brian.
Brian,
I believe "deed to buy" is what I call "contract purchase". In this
situation, the deal is a purchase arrangement, but the seller retains
title. Because this is a purchase contract, the buyer owes the entire
purchase amount to the seller, all the payments made by the buyer are
applied toward interest owed and the purchase price (just like a
regular deal with the bank). When it comes time to unwind the deal
based on what the contract states, the buyer would probably need to
borrow enough money to pay off the seller. This is where the buyer
would probably go to a bank seeking a traditional mortgage and loan. If
the buyer established a good payment history, it would help in the eyes
of the bank. However, if the buyer does not perform according to the
contract and does not remedy the violation within the remedy period,
the buyer forfeits all rights to the property. Because the seller
retains title, it is far easier to get possesion.
A variation of the above is called a "purchase money mortgage". In this
situation, the buyer gets title immediately in exchange for a mortgage
agreement and loan agreement.. If there is a violation of the contract
(loan agreement), it is more difficult for the seller to regain
possession.
Rent to own (lease/purchase or whatever you want to call it) is a
totally different concept. There is no mortgage. There is no loan.
There is (should be) an OPTION AGREEMENT.
Regardless of the type of contractual obligation (rent, buy, rent to
own...), one's credit rating will get impacted, positively or
negatively, depending on the payment history.
Regarding filing the contract with the county, one should always record
(file) his/her legal interest in a property - even a rental lease. Most
people don't do it because they either aren't aware, don't want to
spend the money to record the document(s) or just don't care. By
recording your interest in a property (and yes, a lease is an
interest), you put a cloud on the title. In the event the property
owner tries to sell the property while you have a legal interest in it,
your recording will show up in a title search; and the seller will have
to address your legal interest. For example, when a landlord wants to
sell his/her apartment building, it must be done subject to all
existing lease agreements. In other words, the new property owner must
honor the terms and conditions of all current leases. If you are one of
those tenant/lease holders and have lost your documents, you will may
become like one of the many people who read this and respond with their
own horror stories about how everyone tries to screw them over
everything they do including the air they breathe. But, if you recorded
your lease, you are in a strong position.
Bottom line - ALWAYS record any legal interest you have in a property.
As far as real estate deals go, two people can do almost anything they
want - work with a bank, purchase money mortgage, contract sale, rent
to own, straight lease. The key is that both parties must AGREE to a
deal. If one party is a bank and the other is someone with poor credit,
the odds are there will be no agreement. So the person with poor credit
must look elsewhere.
One more point: Whether you are a buyer, seller, landlord, renter,
bank, whatever; there are good guys and bad guys. There are good deals
and bad deals. There are honest people and dishonest people. It is up
to each individual to look out for themselves. Yes, there are laws to
"protect" you, but it is often too late or to ambiguous for your own
good. If you don't understand what you are about to get into, don't get
into it. Hire a lawyer. Yes, it costs money; but it may be minimal
compared to what the cost of a deal gone wrong might be.
OK all you people who are always being taken advantage of, start
posting your horror stories. Please include all the details you can.
Take as much time as possible to create and submit your tale of woe.
This will be to your benefit because the more time you put into your
sob story will mean you have less time to let yourself get screwed by
the next person.
To all others, good luck with your pursuits.
| |
| Joe Homebuyer 2006-06-17, 9:25 am |
| JSC,
Good stuff, I'll check out your site. We service the Charlotte area
and have had great success with out RTO buyers. We do what ever we can
to help these folks get financed because the longer it takes them to do
so, the longer it takes us to get our real payday.
Joe Bergmann
Home Solutions Consultant
North Carolina Property Solutions, LLC
(704) 302-1112 - Office
(704) 728-6257 - Mobile
(704) 302-1124 - Fax
Visit us on the web at www.ncpropertysolutions.com
JSC Rent To Own Homes wrote:
> doubletfan wrote:
>
> Brian,
>
> I believe "deed to buy" is what I call "contract purchase". In this
> situation, the deal is a purchase arrangement, but the seller retains
> title. Because this is a purchase contract, the buyer owes the entire
> purchase amount to the seller, all the payments made by the buyer are
> applied toward interest owed and the purchase price (just like a
> regular deal with the bank). When it comes time to unwind the deal
> based on what the contract states, the buyer would probably need to
> borrow enough money to pay off the seller. This is where the buyer
> would probably go to a bank seeking a traditional mortgage and loan. If
> the buyer established a good payment history, it would help in the eyes
> of the bank. However, if the buyer does not perform according to the
> contract and does not remedy the violation within the remedy period,
> the buyer forfeits all rights to the property. Because the seller
> retains title, it is far easier to get possesion.
>
> A variation of the above is called a "purchase money mortgage". In this
> situation, the buyer gets title immediately in exchange for a mortgage
> agreement and loan agreement.. If there is a violation of the contract
> (loan agreement), it is more difficult for the seller to regain
> possession.
>
> Rent to own (lease/purchase or whatever you want to call it) is a
> totally different concept. There is no mortgage. There is no loan.
> There is (should be) an OPTION AGREEMENT.
>
> Regardless of the type of contractual obligation (rent, buy, rent to
> own...), one's credit rating will get impacted, positively or
> negatively, depending on the payment history.
>
> Regarding filing the contract with the county, one should always record
> (file) his/her legal interest in a property - even a rental lease. Most
> people don't do it because they either aren't aware, don't want to
> spend the money to record the document(s) or just don't care. By
> recording your interest in a property (and yes, a lease is an
> interest), you put a cloud on the title. In the event the property
> owner tries to sell the property while you have a legal interest in it,
> your recording will show up in a title search; and the seller will have
> to address your legal interest. For example, when a landlord wants to
> sell his/her apartment building, it must be done subject to all
> existing lease agreements. In other words, the new property owner must
> honor the terms and conditions of all current leases. If you are one of
> those tenant/lease holders and have lost your documents, you will may
> become like one of the many people who read this and respond with their
> own horror stories about how everyone tries to screw them over
> everything they do including the air they breathe. But, if you recorded
> your lease, you are in a strong position.
>
> Bottom line - ALWAYS record any legal interest you have in a property.
>
> As far as real estate deals go, two people can do almost anything they
> want - work with a bank, purchase money mortgage, contract sale, rent
> to own, straight lease. The key is that both parties must AGREE to a
> deal. If one party is a bank and the other is someone with poor credit,
> the odds are there will be no agreement. So the person with poor credit
> must look elsewhere.
>
> One more point: Whether you are a buyer, seller, landlord, renter,
> bank, whatever; there are good guys and bad guys. There are good deals
> and bad deals. There are honest people and dishonest people. It is up
> to each individual to look out for themselves. Yes, there are laws to
> "protect" you, but it is often too late or to ambiguous for your own
> good. If you don't understand what you are about to get into, don't get
> into it. Hire a lawyer. Yes, it costs money; but it may be minimal
> compared to what the cost of a deal gone wrong might be.
>
> OK all you people who are always being taken advantage of, start
> posting your horror stories. Please include all the details you can.
> Take as much time as possible to create and submit your tale of woe.
> This will be to your benefit because the more time you put into your
> sob story will mean you have less time to let yourself get screwed by
> the next person.
>
> To all others, good luck with your pursuits.
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