Rent
2 Own a Home
If you would like to know about our California "Rent 2 Own" Homes as soon as they become available
in Marin County, San Diego County or Sonoma County ( and before they are advertised to the general
public) please click the following
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Rent 2 Own is also known as a Lease Option or a Lease
Purchase.
A Lease Purchase Agreement (Rent 2 Own Agreement) is an agreement that combines the right of occupancy (the Lease Agreement) with the Right to Purchase property at an agreed upon price (the Option to
Buy Agreement).
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Why Rent 2 Own?
Here's
Why:
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Tenant/Buyer Benefits
If you are in the market to buy a home, you are
probably aware of the advantages home ownership provides (tax
shelter, appreciation, security, etc). If you are actively seeking
homes for sale on a Lease Purchase agreement, you either
- cannot purchase a home through conventional
means,
- you need time to:
- Establish credit (if you just moved
to town)
- Clean up some minor credit problems
- Save for a down payment
- Find a more affordable loan (after
your credit is improved)
- are not ready to make a commitment,
The Lease Purchase contract provides you with
many features and benefits, but perhaps the most powerful one is
the rate at which you accumulate equity. Compare any lender's loan
amortization schedule to that of a Lease Purchase contract and
you'll quickly see that the Lease Purchase contract wins
hands-down -- every time. Moreover, the buying power of a
Lease Purchase contract can quickly and easily land you a home
that you would never qualify for the conventional way.
Here are some features and benefits for the
tenant/buyer:
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- Faster Equity Growth: Equity
accumulates much faster than
with conventional financing through a bank or lender.
- Rent Money is Working Toward the
Purchase of the Home: Every month a portion of
your rent payment (typically $300-$800, depending on
the home) is credited towards your down payment or off
of the sales price.
- Option Consideration is Credited
Towards the Purchase of the Home: When you sign a
Lease Purchase contract, you will pay the seller an
option deposit. This money is your vested interest in
the home and will be fully (100%) credited to you when
you buy the home.
- Minimum Cash Out of Pocket:
When you purchase a home conventionally, you must pay 5%
- 20% down plus closing costs and pre-paids. When
you buy with a Lease Purchase, you only pay first
month's rent, a security deposit and a 1% to 3%.option
deposit.
- Frequently No Down Payment at
Closing: Since you have given the seller an option
deposit and you have been receiving monthly rent
credits, there will frequently be very little or
nothing left to pay for a down payment at closing.
- Profits from Appreciation:
Since the sales price is locked in before closing (as
specified in your agreement), any increase in property
value will mean that your equity (what you owe minus
what it's worth) is increasing in the home .
- Increased Buying Power: When
you buy a Lease Purchase home, you only pay first
month's rent, a security deposit and a 1% to 3% option
deposit.
Compare
that to a typical bank or lender who requires 5% to
20%
down plus closing costs and pre - paids.
- Credit Problems are Okay:
Qualification restrictions simply do not exist. You
will be approved at the sole discretion of the seller.
- No Lengthy Escrows or Mortgage
Approvals: Your approval will be based solely at
the discretion of the seller instead of a lender who
can take up to a month (or longer) to render a
decision.
- Control of the Home: You will
be put in full legal control of the home for a
specified period of time without actually having to
own it.
- No Taxes, Less Liability:
Since you do not own the home (yet), you will not have
to pay property taxes and your liability exposure will
be dramatically reduced.
- Quick Move In Time: You can
typically take possession of the home in less than one
week instead of conventional move in times of one to
three months after your offer was accepted.
- Maximum Leverage: You are
spending very little money to control a very
expensive, and very profitable, piece of real estate.
- Time: Before you actually buy
the home, you will have 12-24 months or more (depending on your
agreement) to repair your credit, find the best
interest rates, investigate the home and research the
neighborhood and/or schools.
- Minimal Maintenance: Large
maintenance problems or any maintenance problems that
exceed a certain amount of money are delegated to the
seller.
- Privacy: Your name will not be
on the deed until you exercise your option to buy.
- Peace of Mind: You will have
full control of the home.
- Gar C. May Realtor/Broker CA DRE #
479003
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