Ask a Question
or
Create a Poll
  1. Home /
  2. Questions /
  3. Real Estate
  4. / Buying And Selling Real Estate
  5. / Buying And Selling Real Estate (General)

by Afrodite Tsatsis on October 12th, 2005

Afrodite Tsatsis

Question

Help answer this question below.

How does renting a home with an option to buy work?

Share:
Other

Answers. 2 helpful answers below.

  • by respond2us1 on October 21st, 2005

    respond2us1

    The "tenant/buyer" agrees to rent the property for x amount of years, at which time they can either exercise the option to buy it or move on. There is normally a down payment needed before the tenant/buyer moves in to the house, and this down payment is normally non-refundable if the option is not exercised. Once the tenant/buyer is in the house for a year or two, they are a much better risk to a mortgage broker, and have a much better chance of getting approved for a loan.
    The positives: A person with no credit can buy a house. You can live in the house for a year or two before you decide if you want to buy it or not. Usually need a smaller down payment than if you were buying a house. No long waiting period to move in...usually just a few days. Many times, you can live in a house for what you were paying for an apartment before...

    Negatives: If you move out, your option deposit can be lost. Some investors will allow you to switch houses, applying your deposit to the new house, though. No tax advantages. To the IRS, you're a tenant until you buy the house.

    • Like
    • Report

    No comments. Post one | Permalink

  • by cbeach5 on September 16th, 2006

    cbeach5

    Most of these homes are offer this way because the seller can not sell the home for what the pay off is. So they offer other terms to attact people who may have bad credit and get a future price when their credit improves.
    Most times these homes are 10-20% over market value and no bargin.

    No comments. Post one | Permalink

Want to attach an image to your answer? Click here.

Did this answer your question? If not, then ask a new question or create a poll.

More Questions. Additional questions in this category.

You're reading How does renting a home with an option to buy work?

Follow us on Facebook!

Related Ads

Related Questions

Professionally Researched

ANSWERBAG BUZZ

Lease with an option to buy irs
How does rent with option to buy work
Renting a home with option to buy
How does the rent with option to buy work for people with bad credit
I cannot sell my house renting out how to find a good tenant

Answerbag

a Demand Media company