You knew the first moment you saw the words “For Sale” that this was the one. You attend the open house and picture yourself living there already. You put in an offer. The next thing you know, you’re holding the keys to your very own sanctuary.

While this is the typical homebuyer’s fantasy, it isn’t always that straightforward. Most of us know how vicious the seller’s market can be, so thankfully you have other options if the traditional path to homeownership is out of reach.

Keep reading to find out how you can buy a house without the bidding wars and less competition (or maybe even no competition at all).

Off Market Listings

Just because a house isn’t listed for sale on an MLS (multiple listing services) system, doesn’t necessarily mean it isn’t for sale.

Why Would a Seller Not List Their Home for Sale?

There are a few valid reasons why a homeowner may not display a For Sale sign in their yard.

They Aren’t In a Hurry to Sell
In highly competitive markets or a desirable neighborhood, homeowners may receive unsolicited offers on their property. They may be waiting for the right offer to come along, and it could be you!

If the owner isn’t in a rush, that means you have more time to look at the house, arrange inspections, and prepare some additional savings without the pressure from competing offers.

However, it may take a little longer to close and you may need to do a little more research to make sure you’re paying fair market value.

For more information on off-market listings in the Indianapolis area, speak to a trusted Real Estate advisor.

The Home May Be in Foreclosure
When someone’s home is in foreclosure, they usually don’t want the world to know about it. To go into foreclosure means the mortgage hasn’t been paid for multiple months in a row.

The foreclosure process in Indiana takes about 1,617 days. The lender then repossesses the property to sell at an auction or list it as a bank-owned property.

While a foreclosure could mean a great opportunity for you, participating in an auction means you would buy it sight-unseen. While this is common for real estate investors, this can be risky for the average homebuyer.

However, there is another way to take advantage of a home in default.

Pre-Foreclosure
Before the foreclosure process, homeowners fall into something called a pre-foreclosure. During this time, owners in default have options, one of which would be to have a short sale.

While no one wants to lose their home, this is the best-case scenario for both a distressed owner and a potential buyer looking for a deal.

If someone buys the house before the pre-foreclosure period ends, the former owner won’t have a 7-year ding on their credit report, the lender doesn’t have to find a way to pay back the loan, and the buyer is now a homeowner.

To find pre-foreclosure listings in your area, speak to a trusted real estate advisor in the Indianapolis area.

Rent-to-Own

The most common hurdle to homeownership for Millennial and Gen Z is scraping a big enough down payment, even if they’re otherwise qualified for a mortgage.

It’s even more challenging when you still need a place to live in the meantime, meaning they most likely have to budget around a monthly rental payment.

Renting to own is an option to live in the home you’re looking to buy, except you rent it for an agreed amount of years. This gives you time to save up a down payment for a home that is practically on hold for you.

A portion of your monthly rent payment goes straight into an escrow account that applies to your down payment on the purchase. That being said, expect a higher rent payment.

Before signing a rent to own agreement, understand what exactly you’re signing up for. There are three types of rent-to-own agreements you may see.

Lease Purchase Agreement Vs. Lease Option Agreement Vs. Option to Purchase

Lease-Purchase
A lease-purchase means you must purchase the home by the end of the agreed rental period. This is a great opportunity if your dream home happens to be a rental.

The owner cannot work with other potential buyers when under contract with you. Essentially, the home is on hold for you!

You will know the purchase price ahead of time, and you get to adjust to the life of managing the home, repairs, etc. as you save up to make it officially yours.

However, if for any reason, you decide not to go through with the purchase, you could be sued for a breach of contract. Therefore, it’s imperative to know for sure that you can realistically afford it before even signing the document.

Lease Option
This agreement is a little less scary. You have the option to purchase at the end of your rental period. If you walk away, you won’t be legally penalized, but you may lose any accumulated savings that would’ve gone to your down payment.

Option to Purchase
Slightly different than a lease option, your rental period with an option to purchase contract is typically shorter than a lease-purchase or lease-option (roughly a year).

This means you could own that home sooner, assuming you have enough in savings.

However, like a lease-option, if you decide not to purchase, you lose the saved up money and the home that you may fall in love with.

For more details on the Rent-to-Own process, contact a First Option Mortgage lender.

Give Your Landlord an Offer on Your Rental Home

More common than a rent-to-own, most homes for rent are a steady source of income for the landlord. If you’ve been renting a house for a while and still love where you are, perhaps the owner may be open to negotiating selling it to you.

This is great for you if you’ve already developed a trustworthy reputation as a tenant, taken care of the property, and always made payments on time. And it’s an opportunity for the landlord to sell their home without paying realtor fees. You may even get a discount on the price.

There Are Options Out There

As you can see, the “old fashioned” way of buying real estate isn’t the only way. The key is to avoid the competition, so you can take your time and make the right decision for you when you’re ready.

If you’d like more information on hidden opportunities for homeownership, First Option Mortgage can help get you to the right place.

Give us a call today!

Get in touch with a friendly loan originator now to get answers to your questions, and/or to get the ball rolling on your mortgage approval!

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Get in touch with a friendly loan originator now to get answers to your questions, and/or to get the ball rolling on your mortgage approval!

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