The typical approach of Sell a House in Irvine directly to a buyer can be partially avoided by renting it to them now under a rent-to-own deal with the option to buy it later. Let’s look at the benefits and drawbacks of using a rent-to-own agreement to sell a house in Irvine to see if this is the correct step for you.
Pro: Set Your Terms
You get to set the limits for how everything works right from the start when you provide a rent-to-own deal.
Both parties attempt to meet in the middle and close on the property during conventional house sale talks. You can establish a more solid starting point for talks in the case of a rent-to-own agreement.
This allows you to construct the foundation for a contract that suits your objectives while also being fair to the renter/buyer.
Con: Avoid the Pitfalls
It can feel freeing to be able to start the process for your rent-to-own contract, but that level of independence can also lead to overlooking key issues.
We recommend enlisting the help of an experienced real estate attorney to draught your rent-to-own agreement, and then keeping them updated throughout the discussions and signing process.
You don’t want to discover you’re leaving something out that has the potential to escalate a disagreement into full-blown litigation.
Pro: Eliminate Market Competition
When you use a rent-to-own deal to sell your house, one of the unique benefits is that you immediately put your property in a different market position.
Sellers who prefer to sell their homes through standard means are a different beast than those who want to Sell a House in Irvine through unconventional means. You’ll be dealing with a different type of clientele if you advertise your home as a rent-to-own property.
Reducing the number of homes you’re in competition with on your local market allows you to have an elevated place in negotiations.
Con: Vetting Your Renter Is critical
When renter offers begin to arrive, you’ll find yourself in a position where it’s critical to both analyse all sides of their offers and do everything possible to learn about their financial background and credit history.
Because the renter you choose will be signing a legally binding contract that includes them paying you monthly rent and eventually having the opportunity, or being required, to purchase your property, you need to know they are financially stable enough to do so.
Pro: Steady Short-Term Income
Normally, a buyer would supply you with a substantial down payment at closing, but with a rent to own deal, things are a little different.
They may give you an option fee, which is normally between 2 and 7% of the agreed-upon purchase price of the home, as well as rent credits, according to your contract. A portion of their monthly payment is applied to the home’s overall purchase price as rent credits.
Keep in mind that both option fees and rent credits are typically non-refundable.
Con: Not Set in Stone
The fact that you are getting into an extended partnership with someone to potentially have them buy your house eventually gives sellers pause when considering a rent-to-own contract.
This necessitates a certain level of trust and faith in the buyer, and some sellers are unwilling to take such a risk. There’s always the possibility that the buyer will change their mind and fail to fulfil their obligations.
Help With Your Rent to Own Agreement in Irvine
If you’re thinking of Sell a House in Irvine under a rent-to-own agreement but don’t know where to start, contact us today at (714) 701-8210!