Terms and Conditions A contract between the buyer and seller is written on the property and money is held in a non-refundable escrow fund. The selling price is usually negotiated up front, and the buyer pays rent to the seller with a percentage of the monthly rent being applied toward a down payment on the home. When the down payment savings reaches a specified amount, the buyer can then obtain the actual financing for the remaining amount of the purchase price of the home. This arrangement usually works best for buyers who need an extended period of time to raise the funds needed for a down payment, and for sellers who do not need the immediate equity from the sale of their home to purchase another.
Closing usually occurs between nine months and a year after the initial contract is signed.
If the purchaser decides not to purchase the property for some reason, they will lose their escrow funds. The seller knows the house is sold and that if the agreement falls through, he will maintain the earnest money that has been put down buy the buyer. Hire a Professional Buyers or sellers choosing this route should have a professional assist them in preparing a solid agreement to ensure that both sides understand that they are entering into an actual contract. The seller needs to protect himself from selling too low and the potential buyer needs to be certain as to any contingent arrangements which may cause a readjustment of price. Get your FREE Email for business or personal use Compare mortgage products and services from local and regional mortgage companies.