The difficulty in accessing the mortgage encountered today by the majority of potential buyers has prompted real estate operators to seek alternative forms of extension that allow families to purchase the house despite the credit crunch.
Therefore, old customs have been resumed that saw the seller directly extend the purchase price for a predetermined period, already in vogue in the first post-war period, adapting them to current times.
The purpose is essentially now to allow the buyer, who normally has a limited and insufficient advance payment to obtain a mortgage, to ‘save’ by setting aside, through a monthly payment corresponding to the rent, a sum sufficient to cover 20% of the cost of the house which is the advance generally required by banks to grant the mortgage.
A deferred sale until the balance of the sale price as in the past, but of a bridge contract capable of putting the potential buyer in the conditions of being able to buy.
The contractual formulas used can be many:
- lease with future sale agreement
- lease with option agreement
- preliminary sales contract with anticipated effects
- sale with retention of title
- sale with mortgage bills
- lease with redemption agreement
The contractual formula must always be customized according to the specific needs of the buyer and seller, it is clear that these contracts are improperly called rent to own , in reality they are sales contracts not necessarily linked to a lease, but the term usually used it is useful to better understand the mechanism.