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mzkathy531 · May 4, 2014, 01:58 PM

Is there a way to protect the buyer? Contract is in owners best interest.

ScottGem · May 4, 2014, 02:53 PM

Yes, usually the contract is in the seller's interest. However, the contract is whatever you negotiate. What clauses are there that you think do not protect you?

ma0641 · May 4, 2014, 02:58 PM

I would want one in my interest as a seller, particularly if you default. As Scott asks, what clauses bother you?

joypulv · May 4, 2014, 03:06 PM

Rent to own is fraught with problems, I think. How do you write a contract that says the buyer gets X dollars back if he backs out? Rent to own is generally higher monthly payments. How do you deal with fluctuating markets? Either buyer or seller is bound to be disgruntled at the agreed on sale price at times.

I would rent and save my money for a down payment and owner financing. That also gives the tenant time to get a feel for all the things that might be wrong with the house, the neighbors, the town, and his own ability to pay for a home, which is always more than the first time buyer thinks.

mzkathy531 · May 4, 2014, 03:55 PM

Originally Posted by mzkathy531

Is there a way to protect the buyer? Contract is in owners best interest.

I guess what bothers me is that the Owner has the option on if anything unforseen happens to the house, he has 30 days to terminate the lease and everything we have put into the house is lost. Its at his discretion.

ScottGem · May 4, 2014, 04:09 PM

So tell him that clause is unacceptable. Tell him to either remove the clause or rewrite it. He can either be more specific about what would allow him to terminate the contract or allow you to challenge the termination in court.

Fr_Chuck · May 4, 2014, 07:50 PM

Would need to see the clause in context, but most, if the buyer, is in default. Due to any clause, they have 30 days to fix the default or it reverts to a rental and the buying is voided.

Rent to own, or even contract for deeds are often done to buyers with extremely poor credit, who are high risks, so the buyer wants full protection. About 85 to 90 percent fail and the house goes back to the seller.

I sold one house 4 times before the last buyer actually paid it off.

joypulv · May 5, 2014, 05:09 AM

I'll be more emphatic: DON'T do it. Rent normally at a lower rate and save for a down payment and owner financing. That way YOU are on the deed. The owner can foreclose if you default, just like any lender. I agree that most rent to owns fail, at the expense of the tenant/future owner.

smoothy · May 5, 2014, 05:38 AM

I agree with the advice given here by the others... the owners is going to have the contract written to suit them, because they are taking most of the risk, but the contract has to be written within the guidlines of what is legally allowed. Sure you can always ask...but don't expect to get everything you ask for.

There is no way you are going to get a contract that is more in your favor then theirs... as was mentioned. As a property owner I'm not going to give away the farm until after I've been paid for it... so to speak. You really have no other leverage unless you have the credit worthiness to get a mortgage through a traditional lender. And if you do... it would be better for you to buy it by taking out a mortgage.

Rent isn't tax deductible for a residence... but your interest paid on an actual mortgage is.

joypulv · May 5, 2014, 06:33 AM

'... and everything we have put into the house is lost.'

Does this mean it's a fixer upper, and you plan to put time and money into fixing it?
DO NOT DO THIS.
Unless your name is on a deed, do not spend money above the rent!