Rent To Own | How it Works

The Rent to Own transaction begins with a buyer and seller willing to engage in a Rent to Own Lease Option transaction. When they decide to go ahead, they sign a Purchase Agreement, a  Lease Option Agreement, and a Lease.  The option term can fit the parties' mutual  needs. Do you want to the purchase option to begin immediately and end one, two or three years later, or would you prefer that the option not be exercised until a date further in the future? You can choose the timing right for both parties.

The Lease Option Deposit

When the Agreement is signed, the Prospective Buyer puts up a refundable deposit and begins a 17-day contingency period to investigate the property, review seller's disclosures, and the title report.

If the Buyer decides against moving forward, the deposit is returned and the agreement becomes void. If the Buyer decides to go ahead, the rest of the option deposit is paid, and all option deposits become non-refundable, to be credited to the purchase price if the purchase option is exercised. The lease now commences. 

The Lease

The lease often includes an option deposit amount in excess of the rent which is added to the existing option funds. 

Exercising the Option to Purchase

During the option term, the Prospective Buyer may exercise the purchase option or not. If the Prospective Buyer is obtaining a loan or Seller financing, this needs to be done before the Purchase Option is exercised. If exercised, the pre-signed Purchase Agreement takes effect and the parties move toward closing under the Purchase Agreement terms. 

If the Prospective Buyer is not able to obtain the loan or does not agree with the Seller financing, if offered, he may cancel the Option Agreement in which case all option deposits are retained by the Owner as consideration for granting the option and the lease terminates.

If you find this is the answer for you, go to our Fees Page to learn more.