5 Tips for Selling Your House with a Rent-to-Own Contract in Bloomington

5 Tips For Selling Your House Via A Rent To Own Contract in Bloomington!

Selling your house with a rent-to-own contract can be simple! There are numerous excellent benefits to selling this way that homeowners don’t always realize. From reaching more buyers and getting your asking price to turn your property into a monthly income-producing investment, the advantages are significant. Keep reading to learn more about some of these great benefits in our latest post about selling your house with a rent-to-own contract!

Set A Realistic Down Payment

When setting a down payment or option fee in a rent-to-own contract, it needs to be realistic to attract serious buyers. If a buyer cannot qualify for a loan due to lack of down payment, they won’t be able to come up with one for you either. While you should require an option fee from your potential buyer, make sure it is affordable and won’t dissuade them from agreeing to the deal. Typically, this fee is around 1-5% of the purchase price, providing a balance that secures the deal without being overly burdensome.

Consider offering flexible payment plans for the option fee, which can make the agreement more appealing to buyers who might need a bit more time to gather the necessary funds. Ensuring that the fee is reasonable and manageable for the buyer can help facilitate a smoother transaction and increase the likelihood of a successful sale.

Use A Comprehensive Agreement

A detailed and comprehensive rent-to-own agreement is crucial. This contract should cover common situations that buyers and sellers face. By having a thorough agreement upfront, you can avoid disagreements or disturbances down the road. Some key aspects to include are:

Repairs & Maintenance:

Clearly outline who is responsible for what. Minor repairs and maintenance costs are usually the responsibility of the tenant/potential owner, while major issues, like a busted water heater, fall on the property owner. This clarity helps prevent disputes and ensures the property is well-maintained. It’s also beneficial to specify regular maintenance schedules to keep the property in good condition.

Lease Terms:

Decide how long the lease will last. Some contracts last a year, while others extend to three years. The homeowner determines how long they are willing to wait before officially selling the house. A longer lease term can provide more stability and time for the tenant to secure financing. Including a clear timeline for lease renewal and purchase option exercise is essential.

Taxes:

Property taxes remain the responsibility of the person whose name is on the deed. Some agreements charge the prospective buyer a reimbursement cost, ensuring the owner is not left with unexpected expenses. It’s important to outline the payment schedule and any prorated amounts to avoid confusion.

Contingencies:

Ensure the agreement has contingencies for both parties. Buyers should not be expected to purchase the house if undisclosed fundamental issues are found. Honesty and fairness are vital, and contingencies protect both sides from unforeseen circumstances. This can include inspection contingencies and financing contingencies to safeguard the buyer’s investment.

Foreclosure Process:

Outline the foreclosure process and what constitutes a violation of the agreement. While eviction is hopefully unnecessary, having detailed provisions is helpful in case of non-compliance. This clarity ensures both parties understand the consequences of breach of contract. Include specific timelines for notices and actions required to resolve issues before foreclosure is initiated.

Miscellaneous Situations:

Include terms for various potential issues, such as HOA rule violations, unauthorized alterations, or damage from natural disasters. Anticipating these situations can prevent future conflicts and ensure a smoother process. It’s also wise to cover scenarios like subleasing and insurance requirements to protect both parties’ interests.

References and Background Checks

While a rent-to-own contract opens your house to more buyers, it’s crucial to vet them properly to avoid future complications. Conduct thorough research on potential buyers by checking references and running background checks, including credit history and employment verification. Ensure the people entering the agreement can pay each month until they qualify for a mortgage by assessing their financial stability and past rental behavior. This due diligence helps protect your investment and ensures you enter an agreement with reliable and trustworthy tenants who are committed to purchasing your home.

Consult A Pro

Hiring a professional, such as Heartland Funding Inc., to help set up your rent-to-own agreement is crucial. We assist with contract setup, finding the right buyers, answering all questions, and ensuring everything is handled legally and ethically. With our expertise in the rent to own market, you can sell your house, get your asking price, and create an income-producing asset for you and your family. Professional guidance ensures the process is smooth, legal, and beneficial for both parties.

Are you planning on Selling your house with a rent-to-own contract in Bloomington? Contact us today for more information!

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