This questions comes up a lot! The answer to this one is complex and heavily market dependent. Local agents, please chip in here if you’d like.
**THIS IS NOT LEGAL ADVICE**
The short answer is that in the Colorado Springs market, they generally don’t have to. The demand for housing is high and interests rates are so low that the majority of buyers don’t need this type of financing, either.
The longer answer is that a rent to own is not a simple transaction. A lot of folks think this is an easier option than a traditional purchase but that’s not the case.
Rent to own often requires a substantial down payment. Also, this money is usually forfeit to the seller should you the buyer choose not to execute a sale.
That said, they have their place in a market. If a person would like to buy a home but needs time to work on their credit, it’s an option. However, always consult with a lender, Realtor and attorney prior to signing or drafting a lease purchase option contract,
Looking to buy or sell a home in Colorado Springs or Denver? Call Rob at 719-440-6626!
The two most requested searches I receive are a 3 bedroom, 2 bath for under $1,000 and a “rent to own” home. As I was doing my daily real estate reading, I came across this thread on bigger pockets.com; it’s a fascinating (in it’s implications) read on the idea of rent to own vs. right of first refusal. *THIS IS NOT LEGAL ADVICE* It appears that the whole rent to own option from a seller may invoke Dodd Frank, in that a seller offering this option may be performing a financing role, and thus subject to all those lender requirements outlined by law.
The short of it is this: rent to own is VERY complex and not always the best option. This thread has an interesting way to nullify some of the complexity, in the right of first refusal. In practice, it’d allow a renter the safety and comfort of knowing they have first claim to a purchase (that’s my non lawyer read on it anyway).
The short short of it: don’t enter into a rent to own contract without seeking professional guidance! Here’s the thread:
If you’re looking to buy or sell in Colorado Springs, I’d be honored to earn your business! Call Rob at 719-440-6626.