Do you have a property you want to sell in the Connecticut area? For many homeowners, to sell using lease to own will be the most profitable way to sell their home. Learn more about how it works and what you need to do to sell your house using a lease to own agreement!
Many sellers don’t consider the benefits of selling using lease to own agreement for their Connecticut house. While the terms of every contract are different, there are some great perks that you will see across the board. If you don’t need the cash from the sale immediately and are comfortable leasing out the house for an above average amount each month, selling your house via a rent to own agreement might be the best way to sell your Connecticut house!
#1 – Cash Upfront
With most lease to own agreements, the tenant is required to make a down payment to the seller. Getting cash upfront when you sell using lease to own is a good thing because it helps the person who owns the place right away. It makes them feel more secure about getting paid and shows that the person renting really wants to stay there. The money can also be used to fix or make the place nicer. Plus, having cash upfront gives the owner more power to negotiate better terms.. This is usually about 1% of the sale price. Additionally the renter will create a separate agreement with the seller for a separate monthly payment that will go toward the tenant’s down payment when the official sale occurs.
#2 – Generate Passive Income
As long as you have someone renting the home, you’ll make money from it. Sometimes, tenants pay more than the usual rent, and part of that money goes towards the future down payment. The tenant won’t want to risk losing their deposit and chance to buy, so they’ll likely stay for a long time. This means you can count on having a tenant as long as you own the property.
#3 – Get The Price You Want
Tenants using a lease to own agreement typically aren’t able to qualify for a conventional loan. Whether they don’t have the down payment, the income to qualify, or the credit score required, buying via a lease to own agreement will allow people to purchase who may not have been able to in the past. As such, by having the opportunity to buy, these folks will likely be willing to pay your asking price for the property, as long as it’s fair.
Keep in mind that the value of the house could go up or down while the agreement is in place. The negotiated sale price will remain the same.
#4 – No Risk If The Tenant Defaults
With most agreements, if the tenant defaults, the seller is able to keep all monies paid. Sure, you will be back at square one, but you will likely be ahead financially and have the option to sell outright or find a new lease to own tenant. The amount you can profit here may be in the thousands when you include the raised lease and down payment.
#5 – Increase The Number of Potential Buyers
There are kinds of wonderful people out there who could afford to buy your house, people who would never default on their loan. However, they may have a blemish on their credit report or insufficient down payment, making them unable to buy a house.
In today’s market with interest rates so high and lenders tightening their standards, some people are unable to afford a home even if they can find one for under 1% down. They just can’t afford the monthly payments because of how much their are borrowing the added points on the interest rate and the monthly PMI payment.
They want to buy but are being held back due to something on paper. With a lease to own agreement, you will be able to open the door for many people who may not have been able to buy otherwise.
#6 – Sell Your House Faster
Selling using lease to own agreement can reduce the time your house is on the market. Lease-to-own arrangements can help sell a house faster by expanding the pool of potential buyers and attracting those who are committed to purchasing the property.
Offering a lease-to-own option provides increased market exposure for the property. By advertising the lease-to-own opportunity, sellers can attract buyers who specifically search for these types of arrangements. This targeted marketing approach can result in a quicker sale as it reaches potential buyers who are actively seeking lease-to-own opportunities. Additionally, the longer market time associated with lease-to-own agreements allows more prospective buyers to discover and consider the property. This extended period can lead to a faster sale as it provides ample time for interested parties to explore the opportunity and make an informed decision.
#7 – Decreased Selling Costs
How much do you pay a realtor to sell your house, 6%? What about closing costs. These fees can add up. But you as a seller may avoid certain traditional selling costs, such as real estate agent commissions or closing costs, by directly negotiating the terms with the prospective tenant-buyers.