Rent to own is different than a lease option, which gives you the option to buy a place you were renting before it goes on the market, but there’s no obligation to do so. When you rent to own you usually make a deposit, which can also be called "option money," and the contract stipulates your obligation to buy.

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To get into a rent to own home, you sign a rental agreement and also a document that outlines how you plan to purchase the house. The amount you pay can be negotiated, but you generally agree to pay something that’s above market rent. That extra portion-typically 25% to 30% of the monthly payment-goes toward the eventual property purchase.

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Rent to own on a house works when a tenant leases a house from a landlord and buys it before the end of the lease. The landlord and the tenant come to an agreement when they sign the contract that the tenant can purchase the property for a set price. First, you’ll pay a small, upfront option fee.

Rent to own agreements essentially allow a buyer a few years to work on improving their credit score as well as saving additional funds to go towards a down payment. If a lease option to purchase agreement has the selling price of the house, that price is locked in even if real estate values go up. Disadvantages for the seller:

First Access Rent To Own: Get help finding your current credit standing and find rent to own listings near you today! Hidden Listings: Another great option when searching for Rent To Own listings. 10/10. Be A Responsible Home Owner. Now that you have purchased your house you just need to do everything that a responsible home owner does.

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Before entering into an agreement, sellers have to decide the sale price and rent they’ll charge for the house. Both amounts are subject to negotiation, just as a regular sale would be. But sellers and buyers need to remember that once they sign an agreement, the sale price of the house is locked in until the end of their rental term, between one and three years.