Purchasing a home via a rent to own agreement is a fantastic way for renters to transition into homeownership! Nevertheless, like any other real estate investment, it’s vital to exercise caution before signing the contract. The following are several items to keep an eye out for when buying a rent to own house in San Antonio.
If you are thinking about entering into a rent to own arrangement in San Antonio, it’s essential to have a comprehensive understanding of how the process works, what costs are associated with it, and how any potential conflicts can be resolved. As the tenant who is paying money each month, with the goal of one day owning the house, it’s important to do all that can to safeguard yourself. Listed below are several matters to take into account when buying a rent to own house in San Antonio.
Option fees are paid in advance to the owner to confirm the agreement. You can consider it as similar to a security deposit or down payment. Usually, this fee is not refundable in the event you fail to meet your obligations. Nevertheless, by paying the fee, you have the option to purchase the house outright, at a pre-determined price, at the conclusion of your lease. Option fees are typically 2-7% of the final sale price and are usually set at a low level, as those who cannot pay a down payment for a mortgage may be unlikely to afford a high option fee.
The amount of rent you pay each month will likely be higher than that of other rentals. This secures your interest in the property and, in some cases, a portion of your rent payments may go towards the down payment for the home. Although this may be disheartening, it’s only done to protect the interests of the homeowner. Note that this differs from contract to contract and make sure to confirm what you’ll have to pay to buy a rent to own house in San Antonio.
Undisclosed Problems With The House
It’s necessary to include contingencies in the contract in the event of any unforeseen issues with the house. Perhaps the roof leaks, but only during rain in the summer and you moved in during winter. Or maybe there’s a mold problem that wasn’t mentioned to you until after you moved in. In the event of any defects with the house, you should have the option to end the agreement without penalty. When the house is sold and any issues arise, there might be little you can do to rectify the situation.
Maintenance & Repair Costs
In many agreements, the tenant is responsible for minor repairs and maintenance, with the owner covering major repairs. You don’t want to find yourself calling the AC guy frequently to fix the unit on your own dime, due to the owner refusing to pay to replace it. Clarifying who is accountable for what in the contract can help avoid such disagreements.
Excessive Penalties & Fees
It’s important to watch out for hidden fees or charges that may be included in the contract. For example, you might be penalized for paying rent one day late or you may have to pay a fee for investments that are being charged to local homeowners. Carefully go through the contract before signing to make sure you are clear on how repairs, reimbursements, and fees are handled.
Sellers Who Aren’t Ethical
Regrettably, real estate scams are becoming increasingly more frequent. When making an agreement, ensure you investigate the title, sales history, and the owner. Make sure the individual selling the house has the authority to do so. For example, you could pay someone for a house, only to discover they had no right to enter into a contract with you, and then they move away. At Lone Star Real Estate Solutions LLC, we make sure every agreement we facilitate is supported by a clean title. You won’t have to work with unethical sellers or be misled about a property’s condition. Our aim is to create reasonable contracts that are advantageous for both buyers and sellers.