Rent to own is a lease with an option to buy at a later date, usually 2-3 years. It is not ownership. There is no financing involved. You are renting the property until you either exercise the option or move out. Essentially, you're just locking in the purchase price with the option nonrefundable option money payment.
Seller financing is a completely different topic. In that case, the lawyer draws up a promissory note for buyer and seller to sign. The seller can foreclose on the property if the note is in default. The note is a legally binding financial instrument that is registered with the county clerk's office as a lien against the house.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing