Many people do not like the idea of living in an apartment, paying rent to a landlord and having nothing to show for it but cannot afford the money to start the process of owning their own home. If this is the case, there is an option that can make you a homeowner much faster, which is called rent to own. Unfortunately rent to own options do have pitfalls that can affect a buyer. The buyer does need to be aware of before they enter into a rent to own contract.
One thing that a buyer should do is to check the credit report of the seller to make sure that the seller is not in any type of financial trouble such as having a huge amount of debt that is outstanding or in any type of financial trouble. If the credit report gives the seller a satisfactory check mark the buyer should still be watching for any signs that the seller may be having any type of financial distress after signing the contract. Some of the signs could include receiving phone calls from bill collectors or any type of notices that are sent to the house that look suspicious.
Before you enter into a Hawaii rent to own contract, the buyer should also realize that the seller might lose the house while you are living in the house. The seller could lose the house if they cannot make the mortgage payment, they do not pay the property taxes and a tax judgment is put on the house, or if the sellers suddenly go through a divorce or get sued. What this means to the buyer is that if the seller loses the house for any reason the buyer also loses the option to buy the house, loses all the money that they have paid into the house, and will have to move. The only exception would be if the home went into foreclosure and the bank takes it over, the bank may consider selling the house to the buyer.
Before you sign the rent to own contract, you should read it over very carefully or let your attorney do it so it is clear on just who is responsible for which type of repairs and maintenance so there is no question later on if something needs to be repaired or some type of maintenance needs to be done. The buyer should also make sure if they can make any type of improvements or changes to the house while they are in the rent to own contract.