Today, they normally demand upfront payment, so the buyer has to borrow from a bank. These loans are extortionate. The buyer normally pays the bank back about double what he borrowed, over about 30 years.
Instead, the buyer could offer to pay 50% extra on the cost of the house. But he will pay some of it in installments over 30 years. The bank gets nothing, and the buyer and sellers both make huge savings.
It wouldn’t be suitable for every sale, but it would for many. So why don’t people do it? Is there some legal restriction where only the banks are allowed to do this kind of financing?
Even with a rock solid contract with the house in your name as collateral, there is a substantial risk that the house will lose value because of something the new owners did or didn’t do. For most people a house is far and away the biggest investment they have, so any risk is hard to swallow.
There are ‘rent to own’ operations around. I have only ever seen them as predatory because of some of the standard contract language. It might be possible to adapt that model to something like what you’re talking about that isn’t just trying to screw poor people over.
“Rent to own” equivalent to a normal mortgage - a very expensive mortgage. They just describe it a different way.
But this is a good analogy. The risks for to owner are the same as he would have with a tenant, but his responsibilities and costs much fewer.