Rent to own Houlton Maine homes, or rent with option to buy houses, what I see can happen for pitfalls.
If the property being rented is tittering, the owner is not current with house payments, there is one big red flag waving. Hard to miss or should be a major cause for concern. Before someone throws the renter the bone to buy expectation, slow down cowboy.
Someone has to tally up the numbers. Hold the feet to the fire to make sure the seller delivers the payments the renter is sending. To bee line them monthly to the mortgage holder.
Rent to own, rent with option to buy house sale transactions come with a set of odds on whether a real estate closing happens or not.
(Rolling dice thud sound on felt table) Come on snake eyes.
Getting a Maine home loan and escorting the seller out of the picture at a real estate closing is the best course of action. To keep it clean and simple. In our area it is way more advantageous all the way around to buy not rent a Maine house.
But here is where the plot thickens in the rent to own, option to buy a Maine house board game.
When the buyer says no way I can get a home loan, and goes into a discourse on that louse of an ex husband blah blah my credit.
There is strike one.
Not bankable, maybe from the fall out of the divorce.
But often when touching bases with the banker you get to look under her hood, the between the lines reaction shows that that third divorce is the least of the lady's financial woes.
Before, after that untying of the wedding knot we got major concerns.
It has been a keep your seat belts on. Tray in an upright position, your seat way forward. Slowly reeking, sinking, stinking from a poor credit score. Nose bleed high debt ratio. Anemic batting average on how she does poorly consistently. In how she pays her bills. Flying by the seat of her pants the norm of the day. A financial train wreck happening over and over.
So the buyer is Kryptonite on the two step rent to own, rent with option to buy this Maine home dance. Got it. It's crystal.
But wait, there's more in the "As The House Key Turns" saga. The drama starring an home owner behind on payments. Has let insurance coverage lapse, and the escrow for escalating property taxes is not being fed monthly due to the installment delinquency.
Move over poorly performing buyer, the seller has lots of red flags being waved, dropped, showing up all over the place too. The rent to own buyer thinks if I just pay this mortgage payment amount, everything is clear sailing. No shadows of dragons overhead. Hoping for an eventual short sale to get the reins transferred to a bank loan payment book wearing her name. To get the seller out of the rent to own option house buying set up.
Not so fast.
First major assumption is that payment even if made right on time to mail the check to the seller/owner, does it hop in another envelope?
To take a USPS ride through the automation to get to the mortgage holder?
Hard times make hard people by George.
And sometimes that rent to own check is diverted for other things by the seller.
Luxuries like groceries, kid's braces, gas, a new tattoo or body piercing, prom dresses, cell phones...
Lots of little mouths open like a nest of birds wanting financial attention in his household too.
And even if the payment for rent to own is relayed to the bank, mortgage holder, what about the being behind in payments that kicked everything into foreclosure mode?
The legal beagles sending the poison pen $250 a copy letters racking up. The property liens one by one showing up at the registry of deeds. The cost of the deputy sheriffs used to serve them. The other expenses associated with foreclosure proceedings. Past water, sewer, mechanic's liens..don't go away before the foreclosure sale. And the rent to own buyer wannabee gets booted out.
Then because a home loan can be the 15, 20, 30 year garden variety, how long can the rent to own "buyer" hold up his obligation?
Without stubbing his toe.
When the deferred maintenance due to hard times for the wallet or purse of the seller means roof starts leaking.
Bricks fall one by one from the chimney. Furnace goes four stiff feet in the air. Belly up. Plumbing leaks and damage from running out of heating fuel because money just not there to pay for the fill 'er up Chummy.
It can be like the Titanic skipper telling the helmsman to do a 360 circle to see if we can hit that iceberg a second time.
To get the boat to the bottom in pieces quicker. Sinking ship, uneasy feelings in your gut mean put all the numbers on the table. 52 cards face up. Consider all that can happen. Talk about the original mortgage loan accelleration clause that kicks in if a transfer of ownership, wrap around is entered into risk. Before "hood winked", wearing red. Wandering in to the dark, scary woods of the rent to own, rent with option to buy home arrangement.