Have you experienced trouble finding a buyer for your home in the past few months? If you need a way to alleviate the financial burden of your home but cannot sell it, you could turn to a rent-to-own deal. Offering your home to buyers that are interested in this method provides an entirely new buyer pool for you, and you will likely find someone who wants your house. If you choose this method, here are several tips to understand.
The Basic Principles of Rent-To-Own Sales
When you sell your house through a rent-to-own program, you offer the buyer a way to buy your house over time without getting a mortgage right away. Instead, here are the basic principles of this type of deal:
- The buyer pays you a down payment.
- You set a price for the house that the buyer pays you in all.
- The buyer pays you a monthly rent amount.
- You keep your current mortgage on the property.
- Part of the monthly payment goes towards the principal balance of the loan you offer.
- The buyer pays the taxes and home insurance on the property.
- In five or ten years, the buyer gets a mortgage and pays you the balance owed.
- The buyer has exclusive rights to the house.
These are the basic principles of how a rent-to-own sale works, but you will need to consult with a real estate attorney to create the precise details of the arrangement.
You Must Create a Legal Contract for the Arrangement
The primary reason you need a lawyer is for help creating the contract for the rent-to-own deal. A contract is necessary if you plan to complete this type of arrangement. Hiring a lawyer is not only essential to create the contract, but it is also crucial for determining the details of it.
Some of the most vital details include the sale's price, the payment amount, and the responsibilities of the buyer. You should also include details relating to what happens if the buyer defaults on the loan. Your lawyer will also recommend including details that limit the buyer with what he or she can change or modify with the home while you are still holding the mortgage on it.
Before you list your home for sale in this way, talk to a real estate law firm, like Souders Law Group, for advice and help. Selling a home rent-to-own is a big ordeal that requires legal help. To schedule an appointment, contact a real estate attorney law firm in your city.