It's no secret that, "Rent-to-Own" scams abound in the world today.
Unfortunately, great sites like Craigslist, where you can find tons of tenant-buyers to help, have been given a bad name by the few Internet scammers from within the U.S., and from the outside of the U.S.
The following is a quick and short, 6-step checklist that you can share with your tenant-buyers, so they can buy safely and wisely, while avoiding these Internet losers.
Of course, I'll assume that the obvious has already been considered here and that you'll have told your buyers they need to go and actually inspect the property with their own eyes and with the eyes of a a qualified inspector.
You'd think that's an obvious one, but since 2009, I've had would-be tenant-buyers call me and tell me they were about ready to plop down a deposit on another home without seeing it first, because it was such a "great deal."
After all, according to the online pictures, the home was in perfect condition and it was a 3 bedroom, 2 bathroom, 2-story home with a pool and 2 car garage that was going for 1/2 of what it was worth in rent, and all they had to do was send in a security deposit to the home owner, and we would later mail them the keys.
That should be a dead give away, but... not for everyone.
So here are few more things they should watch out for too:
1. Ensure the owner of the home is current on their mortgage before you buy.
2. Get "Bank Authorization" from the owner allowing you to ensure that each of your payments actually go towards the mortgage payments each month.
3. Get everything in writing. All conversations and verbal agreements need to be written down.
4. Once you've bought, take your signed contracts to the county recorder's office and record what you've signed. This places what is called a "Cloud in the Title" declaring to the world that you, and only you, can both lease and buy the home you've bought, "Rent-to-Own."
5. Request that your Option fee and Option assignment fee be transferable, meaning, that you, at a later date, can assign your Option rights to some one else to get your Option down payment back.
6. Seek competent legal advice from a real estate attorney.
If the company you buy from won't allow these things...run.
If you have questions on this topic, or other areas to watch out for that I've missed, feel free to comment below.
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