Tips on closing stubborn type of deal

by REP28 Mar 2016
Many agents may be put off by this one increasingly popular type of deal but here is what you need to know to achieve success, according to one expert in the field.

There is a lot of misinformation among agents about rent-to-own properties, according to Rachel Oliver, managing partner at Clover Properties – including how the payment structure works.

“The #1 thing that stops agents from moving forward with it is because they think they have to wait until the end of the rent-to-own term in order to get their payout as a Realtor, and that is the farthest thing from the truth,” she told REP. “Basically, what happens is they do their buyer-agent representation, and when our investor takes title on a rent-to-own income property, the realtors get paid the way they normally would: their regular commission on closed-end.”

Oliver said agents are often off put by R2O deals because they just aren’t sure what sort of information they need to know about them.

There is also a lot of misinformation in the market about these types of deals, according to Oliver.

They still require a downpayment of 4% and they can be a good option for clients who may have good credit.

“The realtor helps the home buyer find the property they want, and the whole home buying experience is preserved for the people with blemished credit,” Oliver said. “But their 4 per cent now is equity in that property, and they build up that equity through monthly payments, because a lot of these people have worked really hard to even get to a point of having 4 per cent down payment—and then they find out that even with 5 per cent and blemished credit, they’re not going to be able to qualify, so they get really discouraged and they think that they have to stay out of the home buyer market.”

COMMENTS

  • by Robg 3/28/2016 10:58:48 AM

    Be aware that the issue is not getting the rent to own financing completed but getting the financing squared away after the rent to own contract expires.

    A lot more issues with these than you as a Realtor are typically made aware of.

  • by John 3/28/2016 12:00:03 PM

    Not very good article.

  • by Hans 3/28/2016 1:01:54 PM

    Coming up with 5% down and then having to pay extra on top of the mortgage is not a good deal, never mind all the ways you can lose your money! Stay away from this type of deal.

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