Investors - Can you really trust them?

Rent to Buy investors are easy to spot and find. The local and weekend papers contain their ads expressing "I buy houses and pay $20K more", "Quick cash I buy houses in 24 hours", "We buy houses, any area, any condition, any price", etc. Often telegraph poles throughout a local area are plastered with home made signs from Rent to Buy investors advertising their "services". We call this street spam. Its ugly and degrades our suburbs.

If you are a seller and traditional real estate has not brought answers to your selling needs, these ads can look very inviting. These investors will bend over backwards to be given the opportunity to come and meet with you and see your house. The investor will be charming and have all the right things to say. But at the back of the investors mind they will be working the numbers out as to how they can make this deal work for them so they can make money from your circumstance. The sellers position (which usually in these cases is becoming distressed with the need to sell quickly) will become the investors opportunity. The investor will be looking to gain from you the best possible terms he can at the lowest possible sales price.

While what is being offered by the investor may bring instant relief and take the pain away that the seller may be feeling about their unsolved real estate problem - it will not be the best solution with the best outcome for the seller. The scales will be tipped heavily to the Rent to Buy investors side. Knowledge (which is being acted upon by the investor) usually brings power and controls whatever deal is put in place (hence the reason why it is so critical that all sellers dealing with a Rent to Buy investor ALWAYS obtain independent legal advice before going ahead with anything!)

What if the seller knew how to implement a flexible terms sale directly with a Rent to Buy buyer who was willing and happy to pay the sellers price that he/she was either needing or hoping to get without needing the investor? The seller would keep control and gain the best possible result from the house sale. There would be no predatory behavior as the seller and buyer would work together to make the house sale and purchase benefit both parties. Both parties would receive exactly what they are looking for from each other.

A home that is being sold by a Rent to Buy investor is also easy to spot. Often a home made sign is erected in the front yard, with words such as "No Bank Qualifying" or "Rent to Buy" splashed across it. Rent to Buy investors also use the local papers to advertise their Rent to Buy properties for sale in the House and Land for Sale section. These newspaper ads will also state "No Bank Qualifying" or "Rent to Buy".

The unfortunate thing for buyers that purchase a Rent to Buy home from an investor is that they will be paying an inflated price for the property to cover the investors profit margins that he/she is looking to make from the transaction. This is doubly unfortunate for the buyer if the Rent to Buy investor did not purchase the property at a discount himself, meaning that the buyer will be paying a really highly inflated price for the property. When there are middlemen involved in a transaction, someone always has to pay for their involvement.

Buyers looking at purchasing a Rent to Buy property from an investor need to be really careful. Buyers need to know how to qualify these investors to keep the investor on their toes. If you plan to use a Rent to Buy investor to purchase your home, it is critical that you receive your own independent legal advice. It is also critical that you have all terms agreed upon, including the sale price, documented into the legal paperwork BEFORE signing and exchanging.

Real estate should provide winning solutions and answers to both the seller and the buyer. Unfortunately, usually what happens in real estate when third parties are involved (real estate agents and investors), is that the third parties ALWAYS get what they want (their commissions and profits), while one of the parties left wins, and the other party left loses from the transaction.

With a flexible terms sale, third parties are cut out of the picture altogether, leaving both the seller and the buyer to win totally from the sale entered into. Independent legal advice is always sought for both parties, but control is kept with the consumer (the seller and the buyer), not given away to an investor who could, and probably would, set the deal up to advantage him/herself over you.

Our DIY Rent to Buy covers investors and how to qualify and deal with them. The best thing of all though, is that our DIY Rent to Buy manual shows you how to do your own Rent to Buy house purchase or sale so you don't need an investor!