It's a Rent-To-Own - Not a Lease-Option

I am presently advertising 1 of my properties as a rent-to-own. I am trying to uncover an individual who wants to invest in the property but demands a flexible seller who will enable them to rent for a brief time when they qualify for a conventional loan. I have discovered that there is a misconception that rent-to-own and lease-alternative are the very same and that these are interchangeable terms. I disagree.

Call it semantics, but I think there is a difference even though they are comparable and occasionally identical in structure.

The typical lease-alternative or rent-to-own entails a lease or rental agreement and an solution or a buy agreement. Are not those basically the very same? Yes, they are, but the distinction, for me, is how I clarify it to the tenant-buyer or lease-optionee.

If I were explaining a lease-alternative to the lease-optionee, I would tell them that that they are leasing the property. Any time during the solution period, if they want to get the property, they can physical exercise their selection and obtain it for the price described in the choice. Fairly superior deal for them right? They can rent and, at their selection, they can get the home whenever they like.

Now, right here is how I clarify my rent-to-own plan. If you had been my tenant buyer, I would tell you that you are agreeing to purchase the property from me and we would have a acquire agreement to do that. I understand you can have to have some time to get your loan in location and I am willing to be flexible with you and allow you to rent when operating out the particulars of your financing.

Can you see the subtle, however extremely significant difference?

In the lease-alternative, they are leasing the property and if they really feel like it, they can obtain the property by exercising their solution to acquire. In my rent-to-own, they are agreeing to purchase up front and they get the privilege of renting while they are acquiring their loan in place.

Normally, as a salesperson, I am reluctant to right a buyer (think "agree and redirect"), but I am pretty swift to correct my tenant-buyers when they try to say they have an option to purchase. No, no, no... you have to have to like it now and commit to me that you are going to buy. Then, I will be flexible and let you rent-to-own the property provided that you qualify.

These are subtle differences, but they can seriously transform the mentality of those in your property.