Help Our Economy - Buy Or Sell A Rent To Own Home

The statistics for today's economy are not good; unemployment is at 9.2%, there's an estimated 1.2 million homes that will be foreclosed this year and a 1.7 million 'shadow inventory' of homes about to be foreclosed lurking closely behind.

Things are obviously not getting any better with the current band-aids government is offering.

Why not offer solutions instead of patches?

Selling or purchasing a rent to own home could potentially help put money into our economy by saving sellers from foreclosure and credit dings that would prevent them from buying a different home they can better afford, stabilizing house values by reducing the continuous onslaught of foreclosures in the market, stimulate home sales by 'privatizing' them as a rent to own sale, utilize and motivate better than average credit risks to re-purchase rather than rent and to give them time to correct their credit issues so they can qualify for a traditional loan.

Banks wouldn't be taking back defaulted loans, but issuing new ones with more to come in the foreseeable future, the government could stop shoveling good money at soon-to-be-defaulting loans and instead stimulate growth by offering tax incentives to private rent to own home sales, real estate agents and brokers could facilitate these sales for an upfront portion of the down payment and collect their commissions when the sales close. They could also expand services to include property management to fill the financial gap, and lenders and loan officers could specialize in true and regulated credit repair.

The rent to own system is not without vulnerablities that would need to be addressed, but education and government regulations could greatly reduce the risk of potential pitfalls. At least rent to own could be a positive step towards economic healing instead of the vicious cycle of failure we are currently on.

What Buyers Should Know About Rent To Own Home Sales

If you are interested in purchasing a rent to own home, like all business transactions, traditional or otherwise, there are things you need to be aware of and potential pitfalls to avoid. 

While today's economy and real estate market provides people with a lot of good reasons to investigate a rent to own home sale, a non-traditional sale between two private parties can leave gaps that neither realized they missed. 

Here are a few considerations for buyers to review:

First be sure that the asking price for the home is market price or just slightly above. A lender will not blindly grant a loan in whatever amount the seller is requesting - they will only lend on a current fair market value for the property.

It's recommended that a buyer does some investigation before signing a lease, including purchasing a home inspection to be sure the structure is sound, a title check to be sure it's clear of any liens, and request proof from the seller that they are current on their mortgage payments.

One big issue buyers frequently run into is still being unable to qualify for traditional financing at the lease's end. If a seller isn't willing to wait another year or two and take another chance the buyer still won't qualify, the money put down and any rent credits earned will be lost, creating bad feelings for both the buyer and the disappointed home seller.

Buyers need to have a credible credit resource review their current situation and give them a fair estimate of how many years it will take to repair their credit enough to qualify for a loan, typically from two to five years. 

Knowing this information before they look at available rent to own homes will help align the excitement and emotion of looking with the common sense of the needs of both parties. Will the seller allow a long enough lease period for the buyer to qualify? Maybe the seller can't wait; it's better to know that before you get too excited.

Once a buyer has found a home at the right price and on acceptable terms, the final key to a successful rent to own home sale is for the buyer to diligently spend that time straightening out the credit issues that are holding them back from qualifying for a loan. 

It's very easy when you are living in the residence to forget that you are renters-in-transition and not the home owners during the lease period. Frequently rent to own home buyers will start to feel too comfortable and make big purchases or take financial risks that could effect their chances of qualifying down the road.

Finally, if there aren't any rent to own homes for sale in your area, look around at the For Sale By Owner or even traditional sales. There are plenty of homes just sitting on the market, and if you find one you really like, see how long it has been on the market. If the owners have been waiting for a long time they may be open to selling the home rent to own.

Then move forward with your eyes open and your sleeves rolled up and soon you may be the master of your own castle - and the master of your credit once again!

Lenders Get Bailed Out While Lendees Left Homeless - What To Do?

Are you concerned about the effect today’s economy is having on the American Dream of home ownership?

Great homes are just sitting on the market and many great buyers are unable to get financing – everything sits stagnant and millions now have credit issues – while those who acted irresponsibly have been bailed out.

Did I get this right?

Lenders loan to home owners irresponsibly, lenders crash the housing market, millions walk away from upside down homes and/or file bankruptsy, those millions and more bail out the lenders, who now won't lend to those they made homeless.

How fair is that? I guess in today's fragile economy, fairness doesn't have much to do with it.

One solution is the rent to own option. If sellers can wait for their house to close while buyers correct their credit issues, mortgage payments can be met and buyers can be establishing residential and employment history.

Rather than leaving homeownership for the fortunate few, many can have a successful home transaction by renting to own.

Rent to own buyers and sellers can do the transaction on their own, but there is help available.

Property managers, real estate agents, real estate lawyers and rent to own programs are available and each should be evaluated on their own merits as to if they are good options for your situation.

Look into the rent to own option carefully to determine if this could be a good solution for your situation. Being aware of potential pitfalls will help to avoid them and make your rent to own home sale a successful transaction.