A great way to get your asking price for your Fort Myers house, is by selling via rent to own agreement. Many sellers don’t realize just how beneficial the process can be. Learn more about how it works and how it will benefit you in our latest post!
If you have had trouble selling your house in Fort Myers or if you haven’t been able to get an offer reflective of your asking price, a rent to own sale might be an incredible option for you. If you don’t need the cash from the sale immediately, a rent to own scenario can be one of the most lucrative ways to sell your house.
How A Rent To Own Agreement Works
A rent to own agreement is entered into between a buyer and seller and can provide benefits to both parties. The buyer will agree to rent the property for a specific period of time before they purchase outright with the help of a conventional loan. During the rental period, the rent will likely be higher than the market average and there will usually be a down payment made upfront. This helps to ensure the tenant won’t simply walk away once the rental period has elapsed. The tenant is given 1-3 years before the purchase will need to be made. The sale price can be negotiated up from or be based on market data at the time of the sale. By agreeing on a price today, you’ll be able to get your asking price, plan for the future, and continue to make a passive income over the next couple of years.
Perks for the buyer:
- The ability to buy without a down payment
- The ability to buy with poor credit
- The ability to lock in a price for the home at today’s rates
- The ability to try a home before committing to buy it
Perks for the seller:
- Get their asking price
- Guaranteed income for the duration of the lease
- Cash up front
- Ending some holding costs for things like taxes and maintenance
How To Set One Up
When it comes to drafting agreements, especially in real estate transactions, relying on standard boilerplate templates is a common practice. These templates provide a foundation by covering essential aspects of the agreement. However, it’s crucial to understand that every deal is unique, and additional terms or specific details may be necessary to address specific circumstances or protect your interests comprehensively.
Adding extra layers of protection can safeguard you in case of unforeseen events or disputes. These additional terms can include specifics about property conditions, responsibilities of each party, timelines, and any other important details relevant to the transaction.
To ensure that your agreement is thorough and legally sound, it’s advisable to have a legal professional review it before finalizing. A real estate lawyer can help identify any potential issues, ensure all necessary provisions are included, and provide valuable insights to protect your interests throughout the transaction. Taking these steps can help mitigate risks and provide peace of mind when entering into a real estate agreement.
Some specifics you will want to include are:
- The amount paid in rent each month
- The amount of the down payment to be made upfront
- The amount of the option fee
- The length of the lease before the sale needs to be completed
- Penalties for late payments
- Penalties for defaulting on the agreement
- Tenant and landlord responsibilities for repairs, taxes, utilities, and other ownership costs
- Contingencies for canceling the sale
- The final sale price
There are many other things you can include in your rent to own agreement, but the above items should be at the top of the list. Ask your lawyer, agent, or consultant about anything you may have overlooked in your agreement.
How To Get Your Asking Price
When you enter into a rent-to-own agreement with a buyer, you’re not just renting out your property; you’re also setting the stage for a future sale. One of the key advantages of this arrangement is the ability to establish the sale price upfront. This can be particularly beneficial in a volatile real estate market where prices are subject to change. By determining the sale price at the beginning of the agreement, you can ensure that you receive your desired price for the home, even if market conditions shift and prices rise significantly.
For the buyer, this means they have the opportunity to purchase the property at a set price, regardless of how much the market value may increase during the rental period. This can provide a sense of security and predictability, knowing that they won’t be priced out of the market if prices skyrocket. Additionally, locking in the sale price upfront can be a motivating factor for the buyer, encouraging them to continue with the agreement and eventually purchase the property.