Cash-strapped home buyers have an option to rent-to-town at many Chicago area real estate developments.

Real estate experts say the benefits of renting -to-own are myriad, and one of the most popular reasons is that most rent-to-own agreements don’t require a hefty down payment or upfront costs. Terms on renting-to-own vary per property and oftentimes terms are specifically customized by the financial situation of the renter.

“In a lease-to-own, you basically have two contract agreements, one lease and one purchase agreement with and agreed upon purchase price,” said Andrew Hayes, spokesman for Baird & Warner. “An earnest money deposit is collected and held by either an attorney or preferably the listing broker just as it would be in a normal purchase contract.”

Hayes says Baird & Warner “highly recommends” that the property owner utilizes the services of a real estate attorney that is experienced in purchase options and lease-to-own transactions.

Eastgate Village

On the Near South Side, New West Realty has recently launched “Path to Home Ownership,” a rent-to-own program, at Eastgate Village, a planned 300-unit residential development at 26th Street and Martin Luther King Drive. The 10-acre Eastgate Village features a mix of 3-story townhomes and walk-up condominium buildings.

The rent-to-own program recently increased the rate on its current plan to now call for 75 percent of the prospective buyer’s monthly rent to be held in escrow as a down payment cash to purchase the residence at the end of the year, said Ted Mazola, partner in New West Realty, which is co-developing Eastgate Village with Mercy Developers, a partnership of Fogelson Properties and Forest City Enterprises.

“Homeownership for first-time-buyers is attainable, especially when you combine our rent-to-own program with today’s rock-bottom market mortgage rates and President Obama’s stimulus package,” Mazola noted. “That package gives first-time homebuyers an $8,000 tax credit that does not have to be paid back.” The 1-bedroom, 2-bedroom, and 3-bedroom condominiums at Eastgate Village are priced from the upper $200,000’s to the $500,000 bracket. Nine immediate occupancy townhomes and eight walk-up condos are targeted for the rent-to-own program.

For example, the Adler 62A floor plan is priced $279,900. Under the rent-to-own program, the buyer of the 2-bedroom condo would lease the unit for one year at a monthly rent of $1,650. With 75 percent of the rent – $1, 237.50 – escrowed each month in the down payment account, the buyer would have accumulated $14,850 in cash by the end of the year.

For more information on Eastgate Village, call (312) 683-0660.

Disclaimer
The articles appearing on this site were not written by New West Realty. New West Realty is not responsible for inaccurate information contained therein, including, but not limited to, square footages and pricing.