If you watch the Santa Cruz real estate market, you probably know it’s finally showing a little bit of upswing, with national home sales going up by 2.4% in May. While lower mortgage rates and more affordable home prices, along with an $8,000 tax credit for first time buyers, has made selling a home easier, you may still end up holding on to that house for quite awhile. Instead of selling straight out, consider renting to own.
Called a “rent-to-own” or “lease-option,” these deals normally require paying around 5% of the overall purchase price in up-front fees. In addition, buyers are usually required to pay extra rent each month. This is a win-win situation for both the buyer and the seller.
For you as the seller, you have regular rent that goes into your pocket, either to pay down the mortgage you still have on your home or to go toward your new home. In addition, you keep the property profitable as well as get it off the over-stuffed Santa Cruz real estate market.
For the "rent-to-own" buyer, the additional rent payment knocks down the selling price. Properly drafted, a lease option agreement can help buyers having trouble arranging financing or money for the down payment.
Typically, lease agreements are written in 12 to 36 month increments. If the buyer decides they don’t want to buy after all, you can:
a) Put the house back on the market to sell straight out.
b) Put it back on the market as a rent-to-own.
This is also a plus for you, as you can have the contract state that you keep the deposit, as well as the extra rent they have paid.
Don’t think this is just for home sellers, either. Many condominiums are offering the option as well. Some developers are even offering to apply 100% of the rent toward the purchase of the condo.
There are some possible drawbacks to this option, but it is something to consider if you’re trying to sell your Santa Cruz real estate and can’t get it off the market.
If you’d like to sell your home, I can help. I specialize in solutions that get your home off the market fast and give you the most money in your pocket. Call me now at 831.662.6522 or email me at firstname.lastname@example.org
Real estate market
Lease option agreement