Good Advice about Rent to Own Property

There is good news for people who are still renting because a credit score or other problem is prohibiting purchase of a real estate bargain. A recent article refers to the opportunity of rent to own homes. Even better, it addresses the things prospective buyers and sellers need to know about the process, such as costs, obligations and guidance.

Lease option agreements and rent to own homes are discussed as an advantage. Additional rental premium is held in a separate account by the owner to apply towards a down payment. If an option fee is part of the agreement, it will be credited to the down payment.

Guidelines suggest steps to take before signing an agreement. Verifying ownership, a clear title and an appraisal are just a few of the hints to avoid problems. Another valuable tip is to speak with a mortgage lender about how to qualify to buy the home when the lease option agreement expires. A current appraisal will provide the lender with documentation to review.

In-depth issues regarding rent to own homes are addressed to serve as a caution to both buyers and owners. These include issues when the home has lost value at the end of the agreement or the prospective buyer does not qualify for a loan. Advantages given the homeowner in this type of situation are also covered. The result is that both parties enter the agreement better informed and likely to successfully complete the transaction.

Don't Be Afraid Of Scams

Many people trying to locate new housing opportunities online are finding themselves in a maze of ads that seem too good to be true. As the economy slowly begins to recover, more people are hoping to find their own place again. As these people begin searching for possible lease to own situations, they are stumbling on rent to own scam reports by the dozens.

Many of these reports tell the same story, usually a would-be buyer attempting to find a home on a free-to-use website that is available to everyone. The would-be buyer finds the perfect rental property, complete with every amenity that could be hoped for, at a price that is so low as to be unbelievable. Anxiously, the buyer inquires as to how they could go about getting the keys to the property.

The answer usually comes in the form of a poorly constructed story. The would-be buyer is informed, in somewhat less than perfect English, that the owner can't come to meet and interview them in person for some reason. The supposed owner then goes on to tell the would-be buyer that the information needed to check the buyer's credit will suffice instead of meeting face to face, given the circumstances. These reports all end the same way: the would-be buyer's identity is stolen.

Many people are allowing these reports to frighten them away from even trying to locate a new home through the online market. Rent to own scam reports often center around free sites that anyone can use. These situations can be avoided by using rent to own and lease to own sites that are members only. Sites of this nature can control what is posted, and block access to violators. This creates an environment in which it's safe to shop for new homes, even rent to own homes. Use a safe, members only alternative to those free sites, and enjoy a safer buying experience for short sale and foreclosure homes today.

Rent to Own Scams Almost Claim another Victim

Rent to own scams have increased in the United States of America at a rate that can only be judged as alarming. Countless potential home buyers have found themselves ruing bad decisions as they have been conned by individuals adept at rent to own scams. However, as Shanika Tucker showed, there are ways through which a prospective home buyer can evade the clutches of rent to own scam artists.

Ms Tucker was looking to rent a home, so she went through Craiglist looking for prospective properties. She visited the property, liked the offer and subsequently responded to the online advertisement. She was then asked by the so called owner of the home to provide 1400 American dollars as an advance towards the first month and the last month. The fact that this offer was also one of the many rent to own scams on the internet these days came out as the owner asked Ms Tucker to wire him 1400 American dollars.

This perked up her ears, which was when she dug deeper into the property and found another listing for the same home on another website as a rent to own property. The lease to own offer on the other website resulted in Ms Tucker asking the first offer provider some penetrating questions. At this point, the so called landlord bailed.

This simply shows that any potential home buyer or renter, if they stay aware and keep alert, can easily avoid being conned by such rent to own scams. There are some telltale signs that a real estate offer is one of the many rent to own scams proliferating on the internet. A demand to wire the money and the claim that the property owner is out of town or country are a couple of examples of these telltale signs.

Bank Foreclosures Can Be Used For Rent to Own Scams

Bank foreclosures can be used for rent to own scams. This was evident in Florida, wherein a man managed to dupe two women into believing that he owned a home and was renting it to them with the option of owning it later. However, in reality the home that this man was touting was one of the many bank foreclosures in Florida. His technique is very common in rent to own scams.

The modus operandi of such rent to own scams is fairly simple. An individual will spot some bank foreclosures, choose the right ones and place an advert on craigslist or other website for a rent to own property. When interested renters start showing up, the individual simply asks them to take a tour of the unlocked property. Once the renter likes the property, the individual meets the renter and takes an advance for the first month, the second month or even both.

In the situation described above, the renter became skeptical while paying the second half of the money to the man which is when she pulled out of the deal. She received a check for the money that she had already paid which, not surprisingly, was for an account already closed. Further scrutiny later revealed that the home from a bank foreclosures listing had already been rented by the culprit to another woman.

Are Rent-to-Own Homes Rent-to-Own Scams?

If you don’t have the cash to buy a laptop, and your credit score is not high enough to take out a loan for a laptop, what can you do? It used to be that you were out of luck and would have to save your money until you could afford to make the purchase, but that is not what many consumers are doing today. Many are falling for rent-to-own scams that allow them to take home laptops and other items now while making payments for one to three years in the future.

This seems like a great deal, since consumers get the items they want now but don’t have to pay for the items entirely right now. Unfortunately, there are many rent-to-own complaints from consumers who have been taken advantage of with these deals. The ending price paid is substantially higher than the products are actually worth, and some companies take the items back if a single payment is missed. Consumers end up losing all of the money paid into the product, which is why these arrangements are considered rent-to-own scams.

Are Rent-to-Own Homes Different?

Rent-to-own homes are often painted with the same brush of rent-to-own scams by consumers who do not understand the housing market. The “rent-to-own” tag is quite deceptive because it can mean different things in different industries.

In the appliance and furniture industry the term refers to agreements to make payments on products over time. In the housing industry, the term refers to agreements allowing homeowners to accept rental agreements that give the renters the option of purchasing the home at the end of the agreement. When you look at the details of these agreements, you see how they are different from rent-to-own scams in other industries.

How Does Rent-to-Own Work?

A rent-to-own agreement for a home is basically a long term lease with the option to purchase the home at the end of the lease. You pay your rent each month just as you would with a standard rental agreement, but the finer details are different:

1. You pay a bit more than a standard renter would pay. The extra money is saved in an account to be applied to your down payment if you decide to purchase the home at the end of your lease agreement. If you do not purchase the home, then this money goes to the homeowner.
2. Some agreements offer a lease option, which substantially increases the down payment you can earn to purchase the home at the end.

Rather than signing another rental agreement at the end of your lease, a rent-to-own agreement allows you to become the owner of the home at the end of the agreement. (Here is a sample lease option contract).

The Bottom Line

Rent-to-own homes are clearly not rent-to-own scams. They work in the favor of renters who dream of owning their own homes, but who do not have the money to pay a down payment or the credit to finance a home. These agreements are legitimate options for those who want to own their own home but cannot do so right away. Ultimately, it's up to you to decide whether a lease option is right for you - but this arrangement is clearly a completely different thing than those rent to own scams in the furniture and appliance markets.