For a seller, a dream scenario would be having a buyer appear the day your house hits the market, and make an above-asking offer, your inspection then goes perfectly, and you sell your home with no hiccups.

And in this market, at least, it’s not necessarily inconceivable.

But in reality, some sellers may see their homes sit on the market for months and months with no real offers. Then, you’re approached with a rent-to-own proposition. What should you do?

Some experts are now saying it might actually be worth considering.

In fact, in some situations, it can benefit both parties. And though it may not be a seller’s first-choice offer, a rent-to-own arrangement can ultimately prove surprisingly beneficial. For the seller in a softer housing market, it provides consistent monthly income and movement toward a prospective sale. For the buyer, it provides a place to call home while working toward purchasing the place they’ve come to call their own.

Here are some contractual components to consider for a successful rent-to-own arrangement:

The contract. The rent-to-own arrangement should involve two separate agreements: one for the rental period and one for the purchase. The buyer agrees to rent the house for a set amount of time with the right to purchase the home at the end of the rental agreement. Further, the agreement should include the monthly rent amount, who is responsible for repairs and maintenance during the rental time, and what rights both the landlord and renter have.

Then, the purchase portion of the contract should specify either a mutually agreed-upon purchase price or details of when and how the price will set in the future.

Due diligence. It’s important that the seller assess the buyer’s ability to purchase the house by the pre-planned date by verifying their income and work history, that the buyer has a plan in place to save enough for a down payment and closing costs, and that the buyer will work to fix any credit issues.

As the buyer, you need to be sure that the seller is, in fact, the homeowner and that there are no outstanding liens or judgments against the property.

Option fee. Often, sellers will ask the buyer to pay an option fee which is typically 5-10 percent of the purchase price. If the buyer walks away after the rental period, the option fee is typically forfeited but if the buyer chooses to purchase the home, the money goes toward the purchase price.

Extra rent. Another common consideration of a rent-to-own agreement is for a portion of the monthly rent to go into an escrow account until the date of purchase, at which point the money is applied toward closing costs or the down payment. If the buyer walks away, the money is again forfeited.

Insurance & Repairs. Determine who is insuring the property, and even if the seller continues paying homeowners insurance during the rental, the tenant should have renter’s insurance, too. Also be sure to determine – in writing – exactly who is responsible for maintenance and repairs on the property.

In real estate, it’s always a good idea to be open and flexible to whatever market conditions dictate. And while a rent-to-own agreement may not be a seller’s first, second or third choice, it can often prove to be a very sensible and sound alternative to selling outright.

So whether you’re selling, buying or just have questions about your next move, contact the experienced real estate professionals at DeLeon Sheffield Company.

Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’