lease to own

8 Replies

me and my wife are looking to buy a house lease to own. The couple selling their house seem desperate and doing FSBO, they had me call a Realtor that's basically walking them thru it. When I talked to the Realtor, she said 2 yrs 500/mo but our monthly rent doesn't go towards the principle,( basically just the cost of doing business she says) so at the end of our 2yrs we would have paid 12k that goes to nothing, then have to get financing, and the bank won't loan more than appraised for, is this normal? We believe the house is over priced as it is, and there's a reason the realtor isn't putting her name on it, but she's helping the couple find their new home. I would like for our monthly payments to go towards the principle and for the price to come down a tad, any advice is greatly appreciated.

Its a negotiation. They can propose whatever they want. If its overpriced, offer less. Give them a higher monthly payment and apply some to the principal. If you dont get a good deal walk away. 

To be perfectly honest, lease to own is seldom a good deal for the buyer.  It's really designed to protect the seller.  Without more numbers, it's hard to get a feel for what's happening in this deal.  Could you share more information?

Originally posted by @Jerrell Slay :

me and my wife are looking to buy a house lease to own. The couple selling their house seem desperate and doing FSBO, they had me call a Realtor that's basically walking them thru it. When I talked to the Realtor, she said 2 yrs 500/mo but our monthly rent doesn't go towards the principle,( basically just the cost of doing business she says) so at the end of our 2yrs we would have paid 12k that goes to nothing, then have to get financing, and the bank won't loan more than appraised for, is this normal? We believe the house is over priced as it is, and there's a reason the realtor isn't putting her name on it, but she's helping the couple find their new home. I would like for our monthly payments to go towards the principle and for the price to come down a tad, any advice is greatly appreciated.

Walk away. Sounds like an appalling "deal".

thanks for the advice everyone. The numbers are: 49500 for the house, on my cities property assesor website it says the house is appraised for 35,000. They did do work to the inside and its nice but the neighborhood ain't so great to were the majority of houses sale for 20-40k ( one house sold for 100k new construction bak in 07) , me and my wife thought this would be a great opportunity to obtain a rental property, we plan on living there till its paid off then rent it, we can pay it off pretty quick. the sellers are from Russia and live herhere for some years, should I just talk directly to the sellers and let them talk to there agent? Like James said the realtor is in their corner trying to get them the best deadeal

the wife speak OK English some words she doesn't understand her husband does not spear it to well, I was wonder how to get through the language barrier, they are desperate form what the wife puts off, and obthink the realtor will prevent them from getting it sold this way unless they saold to someone that doesn't know to question things

the assessment value and the appraised value of the house aren't necessarily the same.  You need an appraisal report (or some good comps, sales within 6 months) to know what a reason sale value might be.  

Do they owe any money on the property?  Do you have money for a down-payment to simply buy it?

Also, side note: lease options are generally intended for owner occupants, if the 'buyer' is an investor, the lease has to explicitly allow subletting.  Also, in lease option situations, the original owner is still responsible for repairs and maintenance, etc ... and can have additional liens put on the property.

Do a "contract for deed" where a dollar for dollar is subtracted from principal and get the agent some money for their time

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