Nontraditional Ways to Buy a Home

This past weekend I hosted a homebuying seminar with a fellow real estate agent and as part of my presentation, I wanted to let potential buyers know about some other nontraditional ways to purchase a home.

Some of you may have heard about some rent-to-own and/or lease purchase options from my previous posts and some may have not, but I'm going to talk about it again here as well as two other options to assist with making your home purchase.

During my presentation, I let the potential buyers in on a few rent to own programs I'm affiliated with as well as the requirements to join said companies. To my surprise, some had only heard of one of them, which is Divvy, while the others, Home Partners of American and Dream America, were new to them.

How the programs work is that you apply for their program. They evaluate your finances and assess your credit to see how much house you qualify for. You find an eligible home for the program you're in and make an offer. Once the offer is accepted by the seller, the rent to own company of your choice will purchase the home for you while you rent and will have the option to purchase.

What differs from average renting vs rent to own is the fact that you will automatically have the option to purchase the home once your lease is over. You have up to 5 years (3 years in Texas) to purchase the home and you don't have to wait the entire time. If you're ready in 6 months, a year or however long before the 5 years (3yrs in TX) to purchase.

See photo below for a breakdown of the requirements for each company:

The next nontraditional way to purchase a home is by going with companies who do cash offers. With these companies, you present yourself as a cash buyer.

Here's how it works:

Just like any other program, you have to get approved. Once approved, you and your agent go out looking for the home of your dreams. Once you find the home, you make a cash offer to the seller. If your seller accepts your cash offer, you go through the normal process of closing and then you start to work towards obtaining financing on your own to buy the home back from the cash offer company at the original contract price.

With programs like these, you pay a prorated rent based on the days you need to get your own financing finalized. RibbonCash allows you up to 210 days to obtain financing while Homeward doesn't mention any days the limit you to. In the event you, the buyer, decides not to purchase the home back from either one of these cash companies, they would keep your earnest money and any additional deposit needed to cover the resell of the home. You would also owe the company rent from the time the home was purchased through the day you move out.

See pic of how it works below:

Last, but not least on nontraditional ways to purchase a home is through an organization called NACA.

Many have heard of NACA and either they love or hate it. NACA, which stands for Neighborhood Assistance Corporation of America, is a non profit organization whose mission is to bridge the gap of homeownership for people of color and minorities.

Here's how it works: