Weekly we get calls to the Ann Arbor Real Estate Team, Missy Caulk with buyers asking us to help them find a house or condo with a rent with an option to buy.”
What is a Rent with a Option to Buy
Renting with an option to buy is pretty easy to understand, first you rent and then you buy the same home. Many times renting becomes necessary if you have been subject to a Short Sale or a Foreclosure the last few years and you are not capable of getting a mortgage on a home at this time.
In a few years time this would not be a issue. Therefore renting with an option to buy is great alternative for buyers.
Sometimes the buyers have had their credit destroyed by a divorce and so renting for a year may be more feasible until they can get back on their feet.
Sometimes men need to rent with an option to buy because the divorce is not final and they need to rent until it is. In Michigan we still have dowry rights so any property owned until he divorce is final the wife gets part of the property.
So what’s the problem with renting with an option to buy? First of all homes that are available with a rent to option to buy are hard to find, we are in a rental shortage right now in Ann Arbor, Saline and Dexter. There are more people wanting to rent than homes available so the ones that do come on the market go quickly.
Second,many sellers are reluctant to take a offer with the rent to own option. They fear is they agree to rent for 1-3 years until the buyer can obtain a mortgage that the “market will go up” and they will be stuck selling a home or executing a purchase price now that in three years will be too low.
Third, may local REALTORS don’t publish in the MLS remarks that their sellers would be open to to rent to buy option. Last, week we had made a call to a local agent as we have a buyer who wants to rent for ONE YEAR and then purchase. Having gone through a Short Sale due to job loss and divorce years ago, he is not able to get a loan. His credit is outstanding, and he has a new job.
So we called up the listing agent on a home we had shown him and asked if the sellers would be willing to take a rent to own on their home (which has been on the market for 9 months and smells like smoke)
Never mind he didn’t even ask his sellers, that is a whole different story. Just NO.
Now, if I had been trying to sell my home for 9 months, no offer and had a ready, willing and able buyer I would have 1) asked the sellers, 2) done it.
These are some of the difficulties with Rent with Options to buy. But, many times it can be a win win for both buyer and sellers.
If you have a home you would be willing to sell with a rent to option, give me a call or email as we would love to talk to you.
Post from: Ann Arbor Real Estate Talk