On Your Mark, Get Set . . . GO! Your Pre-Lease Agreement Checklist

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So the time has come and you’re ready to move into your new Rent to Own home. Now that you’ve made the decision to invest in home of your own, it’s time to get the leasing period started. You’ve already picked out the curtains in your head, but it’s important not to get ahead of yourself. Before you sign the line, there are a few things that you should take care of prior to signing on and becoming fully—and financially—committed:

Consult with a financial professional to assess your financial situation and limitations – It’s not enough to know your credit score or what bills you have currently. A financial planner can show you your actually debt-to-income ratio and what kind of home you can realistically afford given your state of affairs. Use this expert to develop a plan for you to determine how much you can afford each month in terms of housing payments versus all other expenses.

Check out the home and the neighborhood during the day and at night – Nothing provides you with a better insight of what the your future home will be like than physically visiting the home a few times to look it over. Any issues you notice inside the house or outside should be noted, photographed, and brought to the attention of the owner so that he/she can take care of it with no expense to you. Be sure to observe how the neighborhood is during the day and night to gauge things like safety, general friendliness, and access to local amenities.

Have the home inspected by a professional – Even after looking the place over on your own, there could be things in hard-to-reach places or inside the walls that could use an expert’s eyes. Issues such as pest infestations, rot, mold, mildew, or other hampering dangers can be identified by home inspector and give you more insight into your decision to lease and perhaps buy the home. The upfront fee is well worth it to prevent yourself from possibly spending a lot more on future repairs on the home.

Hammer out the details of monthly transactions – Before you sign the line, knowing what you have to pay for and in what amount every month can prevent any confusion and possible points of contention between you and the current homeowner. You should definitely discuss which expenses you and the owner are individually responsible for. Some of the expenses you typically have to worry about are the following:

  • Monthly Rent
  • Option Fee (the extra payment made to the homeowner for keeping his/her house off the market to engage in a lease option arrangement with you; this money is typically used to supplement your down payment for the home should you decide in the end to buy the home, but can be kept by the owner as collateral if you do not buy the home)
  • Home Maintenance


Typically you do not worry about the taxes that go along with home ownership until you have purchased the home. Be sure to look over the contract before signing to make sure that the owner did not name you responsible for paying these taxes as he/she is legally responsible for paying the taxes as the current owner.

Ensure that the option fee is placed in an escrow account – Since the fate of these accumulated funds has yet to be decided, it’s always best to elect a third party to look after the funds until the leasing period has concluded and the option to buy the home becomes active. Funneling the option fee into an escrow account prevent you or the current homeowner from accessing the funds fraudulently prior to the end of the leasing period to ensure that is safe.

Seek credit fixing services to try and improve your credit score – Even if you have multiple negative items on your credit report, legislation states that it’s the burden of creditors to prove that these items are in fact valid when challenged. Gaining the assistance of credit fixing firms can reduce your negative items and subsequently improve your credit score enough to qualify for a mortgage when the time comes to buy.

Get pre-approved for a mortgage – Instead of waiting to start the approval process at the tail end of your leasing period, you should try to getting a head start if your credit score is already decent to expedite the approval process. You can start shopping around with different mortgage lenders early who may pre-approve you for a mortgage so you do not have to go through the process nor do you have to worry about not being approved at the end of your leasing period.

If you can accomplish most of these things before you sign the lease agreement, you will be much better prepared to buy the home at the end of your leasing period with little to no problems. If you are ever unsure about any part of your agreement, consult the current homeowner or a real estate professional specializing in Rent-to-Own properties.