You may have heard of this scenario: a seller wants to sell their house, and is willing to take rental payment for a set period of time with the tenant to have a first right to buy at the end of the period, usually one-two years. Good for everyone, right?
Well, maybe not. In rent-to-own scenarios, most buyers end up paying more in rent than they would in a traditional rental situation because they are paying a portion of the down payment as well. They also are often required to pay a down payment at the beginning of the contract, as well. And if they break the contract, depending on how it’s worded, they may get very little back.
If you are thinking of getting into a rent-to-own house, you should absolutely have the agreement reviewed by a lawyer before you sign to make sure that, if you decide at the end of the day that you don’t want to buy, all that extra money comes back to you.