Home Rent to Own | Power of Sale/Foreclosure | Credit Management Homeownership Re-Engineering - How You Can Save Yo - Page 4
How Does Rent To Own Work
• Lease Contract with Option to Purchase
– This lease entails the occupant pay an “option fee” in lieu of the
entitlement to buy a real estate at an advanced date. If the occupant
does exercise that preference, the seller is obligated to sell the real
estate to the occupant and use the option fee towards the purchase
amount. If the occupant decides not to use that choice, they will lose
the option money.
• Lease Contract with Purchase Agreement
– Another agreement type is a lease with the purchase agreement. In this
case, either both sides decide on a determined purchase price, or come
to an understanding that the price of the real estate will be set with an
appraisal, along with the succeeding closing date. Everything is decided
from the start. Expert real estate investors believe that this kind of
contract is the better preference.