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Rent to own.

By William Feela

Real Estate Broker/Owner with WHISPERING PINES REALTY 20398180

February 25, 2012 12:15 AM

This is more for the sellers. Should you rent your property to someone that is going to buy it.

Scenario...I have a seller who received an offer. The buyer wants to rent the house until they sell ther home out of state. My sellers think this is great because they don't need to sell in order to move.

Problems we need to make sure are covered...

Price for the home is agreed upon.
The list price for the buyers home is in the market price range for the area.
The area the buyers home is has a market that is fairly active.
The buyers home is NOT in a short sale or late on payments.
Earnest money down. (Possibly non-refundable if the sale does not close)
Proof that the buyer can perform.
How much time to give the buyers to sell.
Should there be a damage deposit in case the deal falls through.
Rental contract and rental amount.
Does any of the rent monies go towards the purchase. (I say NO)
What action does it take to get rid of the buyers if they can't perform.

There are even more issues depending on the property.

Renting may be an option, but if a sale is the main object, look very close at all the issue that could complicate the object.

It is chilly today so My grand Daughter is bundled up.

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Randi Brammer

Randi Brammer, Acctg. - Hinckley, MN

Accountant & Tax Preparer

The Rent to Own is a risky venture even for the buyers. Some people only sell this way. I saw a contract last year where after two years the price of the home went up 20%. Need to look at all the fine print.

Feb 25, 2012 12:24 AM

Mark Delgado

houses for rent, Solano County & Glen Cove - Benicia, CA

Benicia and Vallejo, Property Management, rental h

Perhaps a month to month rental lease would also be in the mix? I'd get a property manager involved to help on that side. It looks as if you've covered the significant issues that need to be addressed.

Feb 25, 2012 01:37 AM

William Feela

WHISPERING PINES REALTY - North Branch, MN

Realtor, Whispering Pines Realty 651-674-5999 No.

Randi...yes, I have also seen a few of these. They really boarder on a scam

Mark...I do some of the rental managing, but most of these, like this one is to be a very short term...with any luck. Still, care must be taken.

Vern Eaton

Askov, MN

Realtor 651-674-7449

I have a friend in the southern part of the state that fell for one othese rent to own scams.

Feb 25, 2012 02:09 AM

Mike Carlier

Lakeville, MN

More opinions than you want to hear about.

Could you just use the standard move in amendment with the purchase agreement?

Feb 25, 2012 03:16 AM

Mike, that is part of what we are looking at. The point is in general things need to be laid out very detailed when doing this. If the Buyer ends up not being able to sell, we have an entire new ball game.

Again, I am not saying NO to this deal, I am saying proceed with caution.

Feb 25, 2012 03:23 AM

Rent to own.

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