The Rent With Option To Buy Maine Home Buyer, What Can Go Wrong.
The calls, emails, texts come in and the question “got any rent to own, option to buy Maine homes available?”
The discussion moves on to a home for sale in Maine that we have listed and whether the property owner would consider a rent to own arrangement.
We have blogged posted about renting vs owning, rental homes in Maine before.
But this post delves into the beyond a month to month tenant at will that is free to come and go with usually a 30 day’s notice. And the Maine home owner can give the same amount of notice to say see you later alligator.
Which works well when a listed home in Maine goes under contract to sell.
And the new buyer with his finger’s crossed hoping for the key’s please is planning on moving in the day of the bank closing.
We see lots of owner financing with Maine land purchases. Have set those seller carried installment sales up on property acreage in Maine for decades now.
With no pre-payment penalty and short term, five years or less generally and smaller purchase prices, not such a large nut to carry monthly mortgage payment.
But buying a home in Maine, and what happens when the purchaser can not get a mortgage loan. It means gotta wait, rent and save up or repair that damaged credit score, debt ratios and whatever is stuck to your financial report for burdocks.
That keep your buyer of a Maine home wannabe from pulling it off. Home sweet home happily ever after.
Or unless they can find a loved one related or not to put the property in their name because they have good enough credit to make the bank go thumbs up. Approved the loan and make everyone happen at a real estate closing.
I get many calls from buyers for a home who are already in a seller contract to rent with option to buy that are not following through with the deal. How come?
They find the property in Maine that was the cat’s meow or was warm and fuzzy a year ago, suddenly has lost its luster and appeal.
And the seller is pushing for the go to the bank and get a loan like we agreed when you moved in. This arrangement was suppose to be for only a year.
I ask the buyer that plans, thinks he or she is going to be able to buy in a year, to go to the bank in Maine now. To fast forward and based on their credit score, their job history, their debt ratios and any other judgements or lint on their financial history if nothing changes, how do they look to the “loan arranger”.
Hi ho Silver.
Can they do it based on what he or see under the hood with a credit check and study of their worthiness to match a program’s hurdles for a bank loan or not now?
And what problems now will still be there in a year?
Or whatever the time to get financed if no longer term rent to own a Maine home arrangement buys them time.
And what has to happen so we can monitor to make sure this, this and that are done.
So the under contract property put on hold for a year actually has a snow ball’s chance of getting to a real estate closing.
If the future does not look good, renting month to month while another buyer is able to consider buying works best for the seller. Who often needs to sell to get out of his or her rent rut while they wait for a sale. Dominoes needed to fall with one sale to call another one.
No money invested and really only wanted a longer term rental period than month to month is why some folks ask for the rent to own option. You just don’t see a lot of rent to own a Maine home situation in our small rural real estate market.
The property prices are so low, the bank moirtgage on the existing place if there is one has an accelleration clause. That says no assumptions and if you try to wrap around it, that transfer of title interest kicks in a all the money is due and payable.
And so the rent to own tenant that makes the monthly payments religiously, like clock work to the property owner assumes those checks are relayed to the bank, to the property tax and house insurance escrow accounts.
What happens if they don’t and the folks show up for the eviction and ask who are you asked? Not really caring while the shuffle legal dance to evict heats up.
You can’t stay and eviction papers are issued while the move out legal process is cranked, ramped up. You are not on record as the owner, as the tenant, rent with option to buy back room deal is exposed, unravels.
And all those improvements are down the drain. Because any large sum of money to buy you time is not available. And you can not get a bank loan for a Maine home remember?
The rent to own buyer and how big the list of folks living under the same house roof is also a concern for the home property owner.
Had a call today wanting a seven bedroom home for four kids, a grandfather, a brother moving back home.
The best tenants are small size in number, head off to work and don’t use the place like a community center that never closes. The wear and tear of too many people home all the time and using the place hard takes it toll on whether it will ever sell. To them, to anyone interested in what is left when they move on or are evicted.
Which takes time, legal fees and the clean out and repair of the high use wear and tear which is above and beyond what the couple that can buy right now through a bank loan program does to a place.
Banks for a mortgage loan are a necessary stop in the buying a home in Maine.
Beware of the rent to own as both the property owner, the home buyer in Maine. There are risks, there are delays and discuss the arrangement with a real estate professional, a banker, a lawyer before finding out what can and does happen from a costly mistake. Here to help with your real estate needs, whether a buyer or seller of Maine property.
207.532.6573 | [email protected] |
MOOERS REALTY 69 North Street Houlton Maine 04730