Selling your house using a rent to own agreement is a great way to easily get the price you want for your Hartselle house. The process is simple and you’ll likely be able to find a buyer right away, even your current tenant! Learn more about how to set it up in our latest post!
There are many reasons why homeowners in Hartselle are choosing to sell their properties via a rent to own agreement. If the cash isn’t needed right away, there are many financial benefits to selling your house in this manner. Below, we outline 3 steps to selling your house using a rent to own agreement in Hartselle!
Step #1 – Find The Right Tenants
When entering into a rent to own agreement with a potential buyer, you’ll want to make sure that person is a reliable candidate. If your goal is to eventually sell the house, you want to ensure that who you choose to buy it is in a good position to do so when the lease period is up. Because you are delaying the sale of your house in order to get the price you want, make sure you are working with someone who is reasonably able to purchase it when the time comes. If you are already currently renting your house with a great, long-term tenant, they may be your first option if they are interested.
Step #2 – Run The Numbers
You are sacrificing an immediate large sum of cash for a long term gain, so you will want to make sure your numbers add up correctly. You’ll need to figure out how much money you should require as a deposit and whether or not you’ll require an option fee as well. You’ll need to decide what monthly rent that should be charged that will not only cover your costs regarding the house while you still own it, but an amount that includes enough over that to make it worth it for you to delay your large lump sum. You’ll need to determine which costs will be passed on to your tenants and which costs you will still need to manage. Due to still being the owner of the house during the lease period, you’ll be responsible for paying the property taxes and home insurance. Make sure the monthly rent you are charging can cover these amounts!
With a rent to own agreement, the sale price is typically locked in at the time of purchase. However, in some cases, a tenant will agree to purchase at the market value at the time of the actual sale. While you run the risk of your home value dropping, you might also be able to get a higher price when all is said and done. If your tenant agrees to this, it is something you will want to consider!
Step #3 – Agree On Terms
There are many things a buyer and seller must agree to before executing their rent to own agreement. Make sure to have an attorney look over the agreement, because even the smallest mistake in your contract could have a substantial impact on your ability to sell on the terms you had originally planned on.
A few of the financial details you will want to cover include:
- Will there be a down payment?
- What will be the monthly rental amount?
- Will there be an amount going toward the buyer’s down payment?
- What is the length of time from the beginning of the rent to own agreement until a purchase is required?
- Who will be responsible for paying the property taxes, home insurance, and maintenance?
- What happens with a default if the buyer is unable to make the purchase at the end of the agreement?
Being as detailed as possible will save you from any disagreement and frustration during the lease process and when it’s time to officially sell. When handled correctly, a rent to own agreement is a great way for a homeowner to sell their house in Hartselle. For people who like the idea of using a rent to own agreement on their house but are leery of going through the process, Jeanne-Buys-Houses has a solution. At Jeanne-Buys-Houses, we strive to make the rent to own transaction of your property go as smoothly as possible for you.