Avoid the Pitfalls of Rent to Own Agreements
When choosing to buy a home through a rent to own contract you might be relieved by the idea that you have typically three years to come up with the money to buy your home, your credit score does not have to be perfect and that as you live in the house a portion of your rent will go towards the payment of the house. While this sounds infallible, it is essential that you carefully look over your contract before you sign it and realize that some homeowners may be hoping to take advantage of your situation.
Read the contract from start to finish
The contract may be 10+ pages and your eyes might be growing weary from technical style but it is important that you read and understand every part of the lease. This is because even minor details could cause you to lose your home and your invested money. With this in mind, make sure you know and understand everything in the contract that could lead to eviction, such as unpaid pet deposits or roommates living in the house that are not on the lease.
Beware of foreclosures
As you know, many states have suffered from a poor housing market and many families continue to lose their homes. This is good reason to be wary before signing a rent to own contract. If the seller’s home is under foreclosure you could lose everything you’ve invested in the house. Because of this, make sure the seller provides you with proof of current mortgage statements and payment information. Another thing you can do is require the seller to send you proof of your payments each month in your contract. This will be proof that the seller is using your money to make payments on the house and not pocketing it.
Thoroughly check the condition of the house before you sign
You do not want to sign a rent to own contract without ensuring that everything in the house is in working condition. This is because some sellers will try to get you to sign the contract and then name you responsible for making all repairs, even for pre-existing conditions. If something is not working in the house, require the seller to fix it before you sign the contract so you won’t get stuck with the bill.
Have a lawyer or real estate broker look over your contract before you sign
This step is highly recommended because lawyers are trained to read documents and contracts to catch loopholes or contradictions. While it is important for you to look over your contract carefully and read through the entire thing, a second opinion could save you from an unfair agreement and a loss of money.
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