New here, hope you can help. I'm thinking of doing a rent to own due to credit problems. They want an option fee of $3 grand, which is fair. What does the owner due with the option fee? Do they have to put it in a bank account so they can't spend it? Jim
It CAN be, but sometimes there are tax advantages to the owner. Again, depends on the contract. In this case, it pays to CYA, as in Call Your Attorney.
True, if you do your homework it can work out. I have always been in the mindset though, if it sounds too good to be true, listen.
Oh, and an option fee is just that, a fee that is paid for the option of completing the contract or not. The owner generally ought to get something for the trouble of taking the property off the market for that period of time and taking a chance on the deal not being completed. Deposits (earnest money, rent deposits), on the other hand are supposed to be put into a escrow account. Once again, the wording is all important.
Never heard of it, but it makes sense. In my case, the lease contract stipulates that the extra fees I pay each month is returned to me if I decide not to exercise my option. I guess I lucked out.
Could be! Each contract is different, as each situation is different. Those lease or rent-to-own contracts are supposed to be prepared by attorneys in any case. If it were me, I'd make darn sure I had my own attorney and not just take the word of the owner's atty. It would be well worth the $$ to make sure I wasn't being taken advantage of.
While I would agree in most cases, in this particular case the contract was fairly easy to read and was very explicit.
