What you need to know about Rent-to-Own Homes
What is a Rent-to-Own Home?
A rent-to-own home program is an agreement where a person agrees to rent a home for a certain amount of time and has the option to buy it at the end of the term. A down payment and a good credit score are required to purchase a home the traditional way. The rent-to-own option is ideal for people who want to buy a home, but they do not meet the requirements for a traditional mortgage. Rent-to-home programs typically last one to three years. If you have questions about Orlando real estate law, it is a good idea to contact an attorney and get the advice you need.
What is Included in the Rent-to-Own Contract?
You will have to pay a non-refundable fee that is known as the option money. The option money gives you the right to buy a home at the end of the lease. The option money price typically ranges from 2 to 7 percent of the purchase price. The buyer and seller will agree on the purchase price. The price is typically higher than the market value.
The potential buyer will have to pay rent every month. A portion of the rent will go towards the home purchase. The potential buyer may be responsible for covering the maintenance, property taxes, homeowners association fees and insurance. However, the seller may choose to cover these costs.
Keep in mind that the potential buyer does not have to purchase the home at the end of the lease. However, if the contract includes a legal agreement, the seller may initiate legal proceedings. If the buyer decides to purchase the home, then they will have to apply for the mortgage. A portion of the rent payment and option money will be deducted from the purchase price.
It is important to remember that the rent-to-own contract is a binding agreement. If a person misses one payment, then the contract may be voided. The contract may also be voided if the home is not maintained.
Contact an Orlando Florida Real Estate Attorney
Real estate law can be complicated. If you are interested in a rent-to-own program, then it is important to remember that you have rights. The skilled real estate lawyers Orlando can help protect your rights. Call and get a consultation today.