Why would a 1st Time Home Buyer want to use a Rent to Buy program to purchase a home?Last modified June 10, 2023
For most 1st Time Home Buyers to achieve Home Ownership in today's market, you need to consider a good honest Lease with Option to Buy program to purchase a home using an all-Cash Offer from a trustworthy Investor. First Time Home Buyers who need to use a down payment assistance program to achieve Homeownership can still use our Rent to Own program and later they can use one of our First Time Home Buyer programs to finance the house into their name when they're mortgage ready. They can also use the 2-month security deposit to help pay for Closing Costs!
If you're a frustrated 1st Time Homebuyer that can't get an accepted Offer because the Sellers are only accepting Contracts that don't have Financing or Appraisal Contingencies in the real estate contract. We definitely feel your pain. This situation is happening on most sub $300,000 single family homes and townhomes that the typical first-time home buyers want to purchase.
Many times, 1st Time Homebuyers would like to buy a home, but they need to work on their credit for a year or two before its high enough to qualify for a mortgage. This is understandable and this scenario fits perfectly for our Lease to Own program. Using our Lease to Own program, the 1st Time Homebuyer can lock in the purchase price for up to 5 years but can purchase the property anytime within 5 years in a series of 1 year lease commitments.
1st Time Home Buyers don't have the equity from their first home to help buy their next home, so this is a great way to use an Investors cash offer to achieve Home Ownership with very little money down and no risk to the first-time homebuyer. If they decide they don't like the area, the house, or their neighbors they can choose not to renew the lease with the option to buy outside of the 60-day lease expiration date. If the home has no damage, they get their 2-month security deposit back and move somewhere else.
Please keep in mind the other reasons a 1st Time Home Buyer would benefit by using a Lease to Buy program.
- In 2021 approximately 28% of all purchases were transacted with Cash. If you have at least $50,000 in Cash, very good FICO 5-4-2 credit scores, and you are willing to exclude the Appraisal and Financing Contingency on the standard Florida Real Estate Contract, then you may be able to buy a home in this Sellers-market. However, if any of those 4 issues are not present or achievable in your financial and emotional profile, in today's market the chances of you being able to buy a home within 50 miles of a large Florida metro area are very slim to none. Unless of course, its property that no-one really wants.
- The reasons for the need for excessive cash on Florida real estate purchase Offer's, in today's market is because houses and properties that everyone wants, there are always Multiple Offers, and the Sellers are generally not accepting the offers that have either 1) Financing Contingencies and/or 2) Appraisal Contingencies because they are much riskier for the Seller. Almost no offers that request Closing Cost concessions will be accepted by Sellers within 50 miles of a major Florida city. This Seller concession is critically important for 1st Time Home Buyers because most of them have relatively little cash to pay for Closing Costs.
- The Florida Real Estate Appreciation rates for 2020 and 2021 combined has been 41%. Goldman Sachs has recently predicted the week of October 18th, 2021, that property appreciation rates will be an additional 16% for 2022. This means that the exact same home that sells for $250,000 on January 1st, 2023, will sell at a price later that year of about $277,500 on December 31, 2023. That means the property will have risen $27,500 (which was 16%) , in twelve months to a projected sales price of $277,500.
- Since 2011 Florida Home prices have risen through appreciation 110.39%. The Florida properties will continue to appreciate. If you don't have a lot of money right now to pay at least 20% Down + 3% in Closing Costs (You'll need all that money in some form including possible Down Payment Assistance) you may never be able to purchase a home in Florida again because the prices will continue to appreciate out of your income qualification range. You can do the math yourself and you'll really begin to understand the problem.
- Many people who could have purchased a home last year, can no longer qualify for a mortgage to buy a home today or in the future unless they use some sort of Lease to Buy program. If they wait any longer, they may not be able to purchase a home this year and that obviously means the following year because the Florida Home appreciation rate will easily outpace the 1st Time Home Buyers income qualification levels to become mortgage ready.
- If you want to gain equity through Appreciation tomorrow, you'll have to buy a house today or in the very near future. To gain equity and make money on your home, you have to either purchase the property outright or Lease to Own the property. Those are your options for making money on your home. The sooner you do it, the more money you will make. The longer you wait, the less chance you'll be able to qualify for the home you want. If you wait too long, you may not qualify for the Rent to Own program, much less a Bank mortgage loan.
- If you don't take advantage of our Rent to Own Program, you won't be able to lock your 2021 price into the program. By the end of this year, you may not even be able to qualify for a Rent to Own property that you really want to call your own. Unfortunately, that's just what the facts are in today's real estate market. If your savings are limited, you are beginning to run out of options for Homeownership. This information is real and true.
Let us help you achieve Home Ownership. We can explain in greater detail and give you solutions! CONTACT US
We look forward to hearing from our Florida 1st Time Homebuyers!