These three following alternatives to selling your house help reach a market that has difficulty or no desire to obtain a mortgage through a traditional lending institution. Make sure if you have any mortgages on the house that you are allowed these options, and check with your state to make sure you satisfy any legal requirements. It is recommended to get help from experts before implementing any of these options.
1. Rent Your House
Some homeowners continue to try to sell their house while renting it out letting tenants know the house is for sale, and you might need to show it with a notice, and that you will give them a 30 day notice if and when the house sells. The downside is the wear and tear tenants can put on a house, so if you go this road, choose your tenants wisely.
2. Lease Options
This option takes renting one step further to a rent-to-own scenario where you still own the house with some eviction powers up until the purchase is actually made. You have two contracts in this case: the rent agreement and the purchase option. The purchase option defines the purchase price, what portions of the rent and deposits go towards the purchase price, an agreement date to which the purchase option is available, and an exit plan in case of non-payment. Always refer to the tenant as the role of a renter in both contracts.
3. Land Contracts
This option is one step beyond the Lease Option. You sell the house to where you no longer own it, but you also finance it. The buyer pays you monthly. This gives you more opportunities to customize the lending and sale process. Your buyer is then in a position to “refinance” as opposed to obtaining a first time loan, and you are in a position if ever you need cash now to sell your contract to another party.