If you are considering a rent to own contract on a home for sale but you aren't sure if you understand all of the terms and conditions in the agreement, meet with a real estate lawyer. If you don't want to pay the commission fees associated with a real estate agent and there is no need to do so, instead you can just pay for a consultation with a lawyer and have the document inspected.
Here are a few things you'll want to talk with the lawyer about, and things you should consider before you agree to purchase the home.
Get an Inspection and Appraisal
If you have the money, you should get the house inspected and appraised, so you know it's in good condition and that it's worth the agreed amount of money you are going to pay the owner over time. You can call a home inspection company to have this done, and you could even have a real estate professional or actual appraiser appraise the house. Look at comparable listings around the property to see what the sale prices are, and compare the square footage and materials throughout the house.
What Portion Goes Towards the Purchase?
The seller isn't going to give you all of the rent towards the cost of the home, and they will give you a percentage. They may have to pay for the taxes and other details, depending on what the two of you agree on, and they want to make a profit since they are taking a risk. Talk with your lawyer to see if the percentage of rent going towards the purchase is fair or agreeable.
Late Payments and Contract Details
Does the document detail what will happen if you have late payments, or what will happen if you fall behind on the lease? It may say that if you are 30 days late the contract is void, meaning you won't be eligible to own the house for the agreed price, and none of the money you already put down will go towards the purchase.
These are just a few of the things your lawyer is going to go over in the contract, and they may see other flaws or areas that are of concern for you as the buyer. If you want to purchase a home that is rent to own and you feel the house is in your budget, talk with a real estate lawyer like Iannello Anderson to ensure the contract is legitimate.
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