A recent email about "Rent to Own"

The following was a question posted on another blog where I have several listings posted. I realize my response is controversial but that is why I'm posting it. Keep in mind as I stated to Miranda, Minot ND has a huge housing shortage and homes that sold for $35,000 just a few years ago are commanding 2 to 3 times that amount today. There are plenty of $250,000 homes available in our market but those are not the ones your typical Contract for Deed buyers are looking for.

My name is Miranda and my question is would you be willing to do a rent to own type of deal?

 Miranda,

The Minot ND area housing market is just the opposite of the rest of the USA. We have a huge shortage of housing here due to our Air Force Base and all of the energy related things going on. Rent to own or Contract for Deed thrives in depressed markets and is hardly heard of in raging markets like the one we have in Minot. Most sellers need the income from their home sale to purchase their next, HOWEVER in the rare case that a seller would consider a Contract for Deed the following criteria usually needs to be met: 1) A large down payment, usually 25% or more of the purchase price. #2) To make it worth the sellers while they are going to want at least a little more then what they could get for rent. A smart seller will state that the monthly payment would be 50% payment and 50% interest. The only way anyone is going to know if a seller is willing to go for a Contract for Deed is to present an offer. On occasion a seller who never thought about it may be interested if the offer is good enough. Your best chance of having a Contract for Deed offer accepted is if it is made to a For Sale By Owner (FSBO).  I say this because a Seller represented by a good agent will get some pretty strong warnings from that agent if he/she is looking out for the sellers best interests as he/she should. One need not look hard into my blogging to see that I have a very low opinion of FSBO sellers. Lets just say that I think B. T. Barnum's famous saying "There is a sucker born every minute" applies to both sides of a FSBO and you are much more likely to sneak an incredible deal past such an idiot.

Bob