Reinventing "rent to buy" for cautious homebuyers

[Bill Wendel]

Around 10am this morning, we helped one buyer client set-up a showing for a luxury condo in downtown Boston that's "for rent," after it failed to sell last year despite a massive price reduction. Five hours later, we showed another buyer client a single family home, in an executive suburb in Metro Boston, that is both for sale and for rent. In both cases, our clients could rent the properties for less than it would cost to buy.

Last year ago, when we helped a Harvard Business School professor rent a multi-million dollar property in Cambridge, we began to wonder if both home buyers and sellers would begin to look to "rent to buy" options, a practice traditionally used by cash-strapped first-time homebuyers, as a win-win solution in the current housing market. Some sellers, who have already moved, are paying two mortgages and need help meeting montly expenses; meanwhile, seems like most homebuyers are sitting on the sidelines, waiting for prices to fall.

What's a win-win solution? We're finding that sellers and listing agents are willing to talk about "rent-to-buy" at a mutually agreed upon future sales price. Bubble weary homebuyers, is that an option that would appeal to you?