Although a rent-to-own could be a good option in certain situations, there are pros and cons that come with it, both for the buyer and the seller. These transactions are complicated, and both buyers and sellers can get some unpleasant surprises. A few examples are listed below, but the list of things that can potentially go wrong is much longer. Before you do or sign anything – It is recommended that you speak to a local real estate attorney so that he or she can give you an idea of what's at stake in your situation.

Forfeiting money: If you don't buy the home — for whatever reason — you lose all the extra money you paid. Sellers who are easily tempted may make it difficult or unattractive for you to buy.

Slow progress: You might plan to improve your credit or increase your income so that you’ll qualify for a loan when the option ends, but things might not work out as planned.

Less control: You don't yet own the property, so you don’t have total control over it. Your landlord could stop making mortgage payments and lose the property through foreclosure, or you may not be in charge of making decisions about major maintenance items. Likewise, your landlord could lose a judgment or quit paying property taxes and end up with liens on the property. The agreement should address all of these scenarios (and the landlord isn’t allowed to sell while you have an option on the property), but legal battles are always a major pain.

Falling prices: Home prices might fall, and you might not be able to renegotiate a lower purchase price. Then you’re left with the option of either forfeiting all your option money or buying the house. A lender will most likely not approve a loan that is larger than the property value, therefore, you will need to bring extra money to cover the gap between the lower price and appraised value in order to close the transaction.

Late payments: Depending on your agreement, if you don't pay rent on time, you may lose the right to purchase (along with losing all of your extra payments). In some cases, you keep your option, but your extra payment for the month is not “counted,” and it won’t add to the amount you’ve accumulated for eventual purchase.

Home issues: There may be problems with the property that you don't know about until you try to buy it (such as title problems). Treat a rent-to-own purchase like a “real” purchase – get an inspection and a title search before diving in.

Scams: Rent to own scams are an appealing way to take large sums of money from people who are not in a financially secure position.