The Rent To Own Process For Sellers in Moreno Valley

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In a slow real estate market – where homes are slow selling and mortgage requirements are stringent – a rent to own arrangement may be a good option for selling a house. In fact, these arrangements are becoming more popular and more common. The rent to own process for sellers in Moreno Valley involves a lease that includes the option for the tenant to purchase the property at the end of the lease or within a specified period. Generally, sellers apply a portion of the rent payments to the purchase price of the house. Here are a few important things to be aware of in the rent to own process for sellers.

Rent to Own Risks for Sellers

When it’s difficult to get a loan, but you need to sell your house, a rent to own option can make it possible. You just need to be aware that there are certain inherent risks in the rent to own process for sellers.

First, you generally have to agree on and specify a sale price in the rent to own contract. But over the lease period leading up to purchase, your house may appreciate significantly and be worth more than the specified sale price. In this scenario, you will lose money.

A second major risk in the rent to own process for sellers in Moreno Valley is that when the time comes, the renter/buyer still may not be able to afford to buy your house. If she couldn’t come up with a down payment or qualify for a mortgage in the first place, there’s no guarantee that she will be able to later on. And then you’ll have to put the house back on the market.

Rent to Own Safeguards for Sellers

In light of these risks, real estate experts recommend incorporating certain safeguards into the contract. These include . . .


Most of the time, the rent to own process for sellers means that they can’t market or sell the house to anyone else during the lease period. But, again, if at the specified time, the renter is unable to buy, sellers will have to start over from scratch.

As a safeguard, then, many sellers require a deposit/down payment of 1% to 5% of the agreed on the sale price. This is called an option fee. At the end of the lease period, if the renter opts to buy your house, you just apply this option fee to the down payment. Or if, on the other hand, the renter can’t or doesn’t want to buy, you keep the option fee.


As we mentioned, your house may very well appreciate during the lease period. So to cover this possibility in the rent to own process for sellers in Moreno Valley, it’s advised that you set the price of the house 5% to 10% above current market value when you draw up the contract.


In addition, it’s also best to include a rent premium in the monthly rent, say, an additional $300 for a monthly rental payment of$1,000. The idea here is to collect a portion of the purchase price along the way to make it more affordable for renters/buyers and to protect yourself as well. If the renter doesn’t buy at the end of the lease, you just keep the rental premium payments.


You can also decrease your involvement both financially and physically by specifying in the rent to own agreement that the renter is to be responsible for maintenance and repairs. That way the renter will be financially vested and less likely to back out at purchase time. And you won’t have the headache of having to be a landlord.

Rent to Own Process for Sellers – The Benefits

Although it’s not common for renters to back out of buying at the end of the lease, it does happen. Sometimes it’s for reasons beyond their control, such as loss of a job or relocation. This works a hardship on both you as the seller and the renter, but generally, the benefits outweigh such drawbacks.


Many renters/buyers who need to enter into a rent to own arrangement really are good prospects – they’re just having some financial and credit issues. The rent to own process for sellers in Moreno Valley can benefit you because these renters/buyers are grateful for the opportunity are usually good tenants while leasing.


In addition, there’s more demand on the buyer side than on the seller side for rent to own arrangements.  So it presents you an opportunity as the seller to stand out from the crowd of homes selling with the traditional mortgage first process. The upshot is that it may be easier to sell your house this way.

So, yes, the rent to own process for sellers in Moreno Valley carries both risks and benefits. But in a competitive, crowded housing market the benefits usually outweigh the risks.

Are you ready to sell a Moreno Valley house? We can help! Send us a message or give us a call today! (951)331-3315

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