100% Equity ‘Rent-to-Own’ Programs!

May 13, 2008

A new advertisement in the Sunday Real Estate section of the Arizona Republic for a condominium community called Avalon Hills in Phoenix that asks “Why Rent when you can own ???”; further claiming 100% of your rent goes to your down payment.  lease option rent to own program

For full disclosure, my brother, Daniel Wexler, who works for ReMax, is the sales manager for the complex and told me about the concept.

These days one of the main challenges for buyers is having enough of a down payment as a result of more stringent lender requirement in obtaining financing.

This 100% equity program allows people who want to buy to enter into an option agreement to purchase the property anytime within 12 months if they choose.

The buyer pays rent each month all of which gets deposited in an escrow account on their behalf; rent accumulates as equity towards a maximum (per the lease-option agreement) 5% down payment.

Several things happen.

  1. the buyer gets a place to live
  2. the buyer can test the community and see if this is a place they want to ultimately live.
  3. they build equity capital towards their loan (money does not get returned should they decided not to exercise their option to buy
  4. 5% additional down payment reduces loan amount, interest rate, and give the buyer a much higher likelihood of obtaining a loan

I have spoken with several real estate attorneys and lending institutions and they have all confirmed that if the money is deposited directly from the buyer into escrow on the buyers behalf, then it is not considered a seller contribution.

However, I always recommend full disclosure when you speak with your bank prior to entering into any purcahse agreement. Show your lender the option agreement, contract and provide full disclosure ahead of time.

I really like the program and I expect to see more and more of this type of seller cooperation with buyers to close real estate transactions in today’s challenging real estate and financing market.

For more information on such rent to own programs in Pheonix, Peoria and Tempe please call Daniel Wexler at 480.200.9097

——————————————————————————–

Copyright © 2008 By James Wexler, All Rights Reserved. *100% Equity ‘Rent-to-Own’ Programs!*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

Related Posts

Written by James Wexler · Filed Under Articles, Buyers 

Comments

Got something to say?