Rent to Buy Options: Explained

Written By Brianna Dearborne

Have your clients ever said “I’m not ready to buy, but I’d love if I could rent to own!” and did you immediately roll your eyes? This is for you.

 

In my realtor days, I thought “rent to own” options didn’t exist. If you’re anything like me, you may not have received the education needed to know there are options that exist and offer affordable and attainable rent to purchase deals for your buyers.

 

Divvy Homes

Divvy Homes is the most common rent to own option that I’ve heard of.

How it works:

  1. You get your buyer pre-approved through their site/invitation link

  2. Your buyer then goes home shopping as you normally would

  3. Divvy purchases the home with a “cash” offer

  4. At move-in, your buyer pays 1-2% of their purchase price which will go towards them purchasing the home from Divvy at a later date

Their website is user friendly, there’s no “catch” outside of the home being a bit more expensive a month to cover the cost of the purchase/”rent”.

Best things about Divvy:

  • They accept credit scores as low as 550

  • If your buyer decides they actually don’t want to buy this home, they can walk away for a nominal relisting fee.

  • They’re currently offering an additional $1500 to realtors that use their services within a small time window after creating your account

Landis

Very similar to Divvy, Landis is another great option for your buyers.

How it works:

  1. Apply through the Landis website or your invitation link. Pre-approvals are issued within 24 hours

  2. Begin your home search as usual. (please note: the under contract process typically takes up to 4 weeks from start to finish, so Landis recommends starting your journey 2 months before you need to move)

  3. Apply with a “cash offer” provided by Landis

  4. Pay a minimum of a 2% down payment that goes towards your savings to purchase the home

Best things about Landis:

  • You can utilize their program for homes priced as low as $110,000 (in TX, may vary by state)

  • Your buyers will have access to a dedicated Homeownership Coach to walk them through building their credit and saving up

  • If your buyer decides they actually don’t want the home, Landis will charge a ~3% relisting fee and your buyer can walk away



Home Partners

With 82 eligible cities in the Houston Metro Area, Home Partners may be a great resource for your homebuyers.

How it works:

  1. Apply through the link online or your invitation link. Pre-approvals are issued in 1-3 business days

  2. Find an eligible home that matches your monthly rental amount

  3. Submit the request form for review

  4. Submit a competitive “cash offer” and lock in your rental rate for up to 3 years (in TX, may vary by state)

  5. Rent the home for up to 3 years while your buyers save/make their decision to purchase (each lease term is for a 1 year period).

Best things about Home Partners:

  • There are NO penalties if your buyer decides to walk away during their lease term

  • Your buyers can purchase the home at any time while they’re leasing

  • Rental rate is locked in for 3 years (in TX, may vary in other states)

Brianna Dearborne
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