While overall low inventory has led to competition in some markets — about a quarter of 2017 home sales yielded sales prices higher than the asking price, according to Zillow — it’s a different story for some sellers.
The median asking price, $256,000, is higher than the median accepted offer: $229,200. And if you’re in a softer housing market, the home you’re trying to unload could sit far longer than the national average of 80 days.
For sellers, even if it’s not the first choice, a rent-to-own arrangement can yield positives: steady monthly income while moving toward the promise of a sale. For buyers, it can mean having a place to plant roots while working toward purchasing the home they’re living in.
There can be a variety of reasons a buyer cannot purchase a home outright, said Martin Orefice, founder of rentoownlabs.com. For instance, someone might be unable to qualify immediately for a mortgage due to credit issues or short work histories. Or, they might need more time to save for a down payment but want to get in a house and stay put.
“The situations where it doesn’t work well is if the buyer has no credit, no steady work and they think about it the way they’d think about renting-to-own, say, a couch,” Orefice said.