Rent-To-Buy Scam: How It Works
(with video below) There have been a plethora of home buying scams exposed by authorities and our platform in the last few years. Unfortunately, it doesn't seem the trend is stopping any time soon.
Although it may sound like a good idea, be aware of the Rent-To-Own Homes scheme (aka Rent-to-Buy scam) that is going around the real estate industry. Under the actual program, buyers hand over an upfront deposit of $10,000- $15,000 and then pay rent, with an additional fee of a few hundred dollars per week.
Buyers are locked into a contract for a few years and are promised that at the end of it, the deposit and additional fees will be taken off the price of the home which they will be purchasing. How does the scam work?
Watch the video below to see in action the Rent To Own Homes scam, exposed:
The "sellers" do not hold real estate licences and the money paid by the buyers is not being directed into a trust account. Besides, there is no guarantee the buyer could obtain a home loan at the end of the contract period.
Both parties agree on the price of the home at the start of the contract. During the contract, the house cannot be sold nor the assets liquidated. Buyers who can't get financing to buy the property at the end of the period lose all the money that was initially going towards the purchase.
Rent-To-Own Scheme: How To Avoid
Don't get involved in such a deal unless you are absolutely sure the business is legitimate. If you are looking for rent to own companies, ask them for references, talk to owners who bought their houses already.
You can't afford not to do an extensive research on these deals. Just because the company owns nice offices and websites doesn't mean they are legal.
When looking for houses for rent with option to buy, ask for help only reputable specialists in the industry and avoid real estate fraud.
Rent-To-Own Scheme: How To Report:
Make your family and friends aware of this scam by sharing it on social media using the buttons provided. You can also officially report the scammers to the Federal Trade Commission using the link below:
How To Protect Yourself More:
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