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A “Rent to Buy” sale is a good alternative for families who have had their home or investment property listed with a real estate agent for 45 days or longer without an acceptable offer. It also is a good way to sell a property if there isn’t equity in the property to cover Seller closing costs and real estate agent fees.

It may cost cash to sell a property with little equity. Sellers continue to own the home until the contract is paid off.

There are three parties in a rent to buy sale: seller, tenant/buyer and real estate agent. The seller needs to make three decisions when deciding if a rent to buy sale is a good option.

  1. Monthly Rent Payment: Will the rent payment cover the cost of your present mortgage payment, taxes, insurance, and unexpected expenses? Do you have money left over after expenses are paid? Cash flow can cover unexpected expenses.
  2. Purchase Price of the Property: Is more money owed on the property than the market value?
  3. How many years are you interested in owning the property? The tenant/buyer will need time to qualify before obtaining FHA, VA, USDA or conventional financing.

The real estate agent provides the seller with a qualified tenant/buyer for the property. “Qualified” meaning an individual or family we have confirmed employment and good rental history without evictions. We pull all applicant’s credit reports to help them understand what is needed for them to restore their credit for loan approval. We can make a good estimate of how long that will take.

The Tenant/Buyer pays an upfront “Rent to Buy” deposit. The amount will be much higher than a standard “damage deposit”. That’s the main difference between “Rent to Buy” and a standard rental agreement. The deposit is deducted from the purchase price of the property when the Rent to Buy
option is exercised. Monthly payments are made to the Seller. The Tenant/Buyer takes the property in as-is condition and is responsible for maintenance and repairs on the property. All monies received
from the Tenant/Buyer after the agreements are signed are non-refundable.

Our experience with Tenant/Buyers they’re much better tenants than renters.

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