Rent to own is one of the ways people can afford to invest in a home. They need to sign an agreement that is defining the rules and obligations every side has, including the right of the person who is taking the property, to have an option to buy it until the lease time expires. This is a little bit different than a mortgage, but it can anyway affect the credit score. The rent-to-own deal has two parts – the lease one, and providing the conditions for buying. It’s not that simple as usual renting, and you have to be sure you really want it.
Also, you have to be aware that different countries and states provide different rules and regulations for this, and you must be very cautious when you are preparing these contracts, so you can protect your interests. Today we will be talking about Virginia’s rules, so we can make this process closer to you before you decide to take that action. This state-regulated the rules with their Chapter 59.1, Section 207 of the Virginia Lease-Purchase Agreement Act of 1988.
According to it, the person who is the owner of the house or apartment should make a deal with the person who is planning to rent and then to buy it, and lists how many payments are required until the renter is eligible to decide to buy the property. Also, in the deal should be mentioned the monthly price, the fees, and the period of renting. Usually, these persons rent the property for more than three years from the very beginning of the process, and even more (some of them are going up to 10 years). The upfront payments, if required, should also be mentioned in the agreement, but if the person is sure they will buy the home at the end, there can be some easing conditions for both sides.
All the time, the process should be monitored by a legal expert or a lawyer, so both sides can be sure everything is done properly. You can read more on Renttoownreviews.com/virginia so you can learn more about the prices, popular neighborhoods, and the general cost of living in Virginia, which is also important when planning to move there, no matter the type of home you will use.
The conditions
In the Virginia Code we mentioned above, the person who owns the property initially should give a precise description of it, so everything is covered from the beginning of the process. All the obligations, responsibilities, and repairs and maintenance rules should be mentioned. Some of them are on the owner because they are obligated to give a completely functional home. But, after the consumer moves in, the reparation expenses are on them, if not regulated differently with the agreement.
Then, this Act also allows the consumer to terminate the agreement during the lease period, or at the end of it, and to lose the right to buy the property after some time. So, it’s not obligatory, and if they don’t want to buy it, they have to give it back to the initial owner completely clean and well-maintained, so they can offer it again to other consumers.
Also, if the consumer doesn’t behave properly to the property, some of the rules and obligations from the agreement can be changed and adapted, as long as both parties think it’s good to do that. After two-thirds of the price is paid, and the consumer decides to give up on the idea of buying, Virginia’s regulations give them 45 days to change their mind. If less than two-thirds are paid, and they want to get back the property to the owner, in this case, they have 21 days to think about their decision. In both cases, they have a full right to decide to buy it anyway, and the lessor shouldn’t influence this decision.
Determine the right price of the monthly fees
The contract is made for a long period, for example at least 5 years in some states, or 10 in others. The homeowner is estimating the price of the property and decides how much of it can be paid with rents until the consumer becomes eligible to buy it. Some fees can be applied, and of course, the electricity and water bills are on the consumer. The prices should be formed based on the market. Also, every owner has a right to determine the price based on their expenses and investments, but that should be reasonably made, because they may end up having a property that no one wants because of the unreasonable price.
This action has both pros and bad sides. For example, those who have bad credit scores can still manage to make a rent-to-own agreement, no matter where they are based in the world. In the meantime, they can work on the credit score, until they are sure they want to buy a home. Also, once this agreement is activated, the price of the property is locked, and the process of changing the price is long and exhausting, which is good for the person that is taking the home. They also have a chance to live there and see if they like the house or the apartment before they decide to buy it. Some of the problems with neighbors and property issues can be prevented right on time. It also has good sides for the seller too, because they can earn additional money during the renting period, or they can attract more potential buyers if they have an attractive offer for them. When accumulated, the monthly payments are more expensive than selling the home at once.
If both sides stick to the conditions in the agreement, they can be sure the collaboration will be great, no matter what the final decision is.
So, if you are sure you want to move to Virginia, and have a home there, take your time, see the offers, find the right one for you and contact the seller or the agency, so you can see it, and decide if the property is the right one for you.
