Rent to Own - How It Works



How it Works

 

Application

Prospective residents start the process by filling out a Pre-Qualification Application.

If the Pre-Qualification Application is approved, the applicant will be required to submit a Full Application for a full credit and background check.

If a Full Application is approved, the Investor will outline the maximum Monthly Rent of the home for which the prospective resident qualifies. (Click here for The Math)

 

Find a Home

Prospective residents will work with RE/MAX and Gwen Wood, REALTOR®, to find a home in an approved community. 

Once a home is identified and approved by the Investor, the Investor will attempt to purchase the home- the outcome of which will depend on certain conditions being met such as agreeing on a purchase price with the seller, a satisfactory inspection, attorney review of the purchase contract, and other closing conditions being satisfied.

 

Agreements and Deposit

Once the Investor's offer for the home is accepted by the seller, prospective residents will be required to sign a one year Lease for the home as well as a Right to Purchase Agreement.

In addition to signing these agreements, prospective residents will be required to provide a deposit that is generally equal to two months' rent. The signed documents and deposit (generally two months total) are typically due within 48 hours of the Investor's offer for the home being accepted by the seller and will be held in escrow pending the closing of the purchase of the home by the Investor. Upon closing of the purchase of the home by the Investor, the deposit will be released to the Investor.

Rent for the first month is due within 72 hours of the closing of the purchase of the home by the Investor (but no later than the resident's move in date). This amount may be less than a full month's rent if the resident moves in after the first of the month. Rent for the first month is pro-rated based on the resident's move in date.

If the purchase of the home does not close and the prospective residents perform all their obligations to the Investor, the deposit will be returned in full to the prospective resident. Prospective residents who fail to perform their obligations to the Investor, such as by failing to provide the deposit and signed Lease and Right to Purchase Agreement after the Investor has entered into a purchase agreement for a home, will be disqualified from participating in the program in the future.

The purchase price in your Right to Purchase, as set at the time you enter into the lease, will include an adjustment equal to $2,500 (a “Maintenance Adjustment”). If you choose to purchase the home, and the maintenance costs covered by the Maintenance Adjustment actually incurred by the Investor during the lease are less than the Maintenance Adjustment, the purchase price of the home at closing will be reduced by the unused amount of the Maintenance Adjustment.

The Maintenance Adjustment generally may be used to cover the cost of any repairs, renovations, replacements or improvements to the home that the Investor determines are necessary or appropriate during your lease term. Examples of the costs for which the Maintenance Adjustment may be used include the replacement of a major mechanical system (e.g., HVAC, furnace, roofing) or the repair of appliances, plumbing or fixtures. The Investor generally is responsible for costs of home repairs in excess of the Maintenance Adjustment and those excess costs will not increase the purchase price for the home.

However, the Maintenance Adjustment does not limit your responsibility for any costs for which you would be responsible under the terms of the lease. Examples of these costs are costs due to your misuse of the home, your willful or negligent conduct, or your failure to comply with the lease. The Investors may require you to pay these other costs separately in accordance with the terms of your lease.

Your rent is not affected by the Maintenance Adjustment, and the Maintenance Adjustment does not affect you unless you purchase the home. For example, if the Investor pays repair costs of $2,500 during the lease term that are covered by the Maintenance Adjustment, and you choose not to buy the home, you will not be required to reimburse Home Partners for those amounts.

The Lease and Right to Purchase Agreement will become effective once the purchase of the home is closed. You may purchase the home at anytime in year 1, 2, or 3 of the lease with mortgage from a 3rd party lender.