Are you currently renting and have decided it’s time to become a homeowner? Why go through the process of looking for a home if you already love the one you are in? If the landlord is willing, there are several ways you can buy the home you rent. In some cases it’s easy, especially if the landlord was already thinking about selling the home. In other cases, it’s not as easy and it might require some work on your end.
Talking to the Landlord
The first step is talking to the landlord. Ask him about his desire to sell the home. Was he thinking about it already? If he was, it could be an easy sell. If he planned to continue renting it out even if you didn’t renew your lease, you may have some convincing to do.
If the landlord wasn’t ready to sell, express your interest and love for the home. Maybe even take the time to do your research to see what current rental rates are in the area. Would he be able to collect the same rent he gets from you or have rates dropped? Is there a demand for rentals in the area or is there a risk that the house will sit vacant for a while?
You can use these factors to your advantage as you try to convince the landlord to sell the home.
Working Out the Terms to Rent
Once you get the landlord to agree to sell the home, it’s time to figure out just how you will buy it. A few things you will need to consider include:
- Do you have a down payment saved?
- Can you secure financing right now?
- Are you still on the fence about what you should do?
The answer to these questions will help you decide which option is best for you. Your options are as follows:
- Purchase the home immediately – If the landlord agrees to sell the home and you are financially prepared, you can purchase the home right away. Before you can proceed, you will need to make sure you have an adequate down payment and can get approved for financing.
- Sign a Lease-Option Agreement – If you aren’t quite ready to buy the home because you don’t have a down payment yet or you have to fix your credit, you can sign a lease with the option to buy the home. There is no obligation to purchase the home at lease expiration if you don’t want to, but you do have the option. As a part of the contract, you will have a pre-determined price that you will pay for the home.
- Rent-to-Own the home – You can also enter into a rent-to-own agreement. In this case, you pay the rent plus an extra predetermined amount that goes towards your down payment. The landlord holds the extra funds in an escrow account for you. When you purchase the home, he then uses those funds for the down payment. If you don’t buy the home, though, no matter the circumstances, you will lose the extra funds you put towards the home.
If you currently rent but want to buy a home, you have options. Even if you can’t afford to buy a home quite yet, you can set yourself up by entering into a rent-to-own agreement. This way you save for a down payment while living in the home that you intend to buy at the end of the rent-to-own agreement.Click to See the Latest Mortgage Rates»