Does anyone have any good suggestions for negotiating rent to own property?
I am currently renting a house for $1300 a month. I want to buy the house but I have no money saved. I was thinking of working out a rent to own agreement at the time of my renewal which is in november. So right now i am trying to get some ideas of how to present a fair deal to my landlord and allow me to save some money. What would ba restructered fair payment that would benefit the both of us? Any suggestions?
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Tags: Buy House, Landlord, rent property
rent property | , 8 May 10
By chantelle m, May 10, 2010 @ 4:36 am
why don’t you just go for a self certified 100% mortgage?
thats what i did and i didnt have to put a penny down,
the legal fee,s where also paid out of the mortgage, i also got an extra 25,000 for home improvements
By Hope Passion Sanity, May 11, 2010 @ 9:23 pm
what do you are work – offer services or free ——whatever to pay a lot less rent……..or get an agreement that the rent be paid into a separate account and once there is alot of $ (say 20K) in it you can agree with the landlord to put that as the deposit and the banks will actually talk to you about a mortgage – if there see you’ve saved money.
Then add that amount to the agreed purchase price to landlord so that is not shorted. it will suit the landlord to help you get a loan so that you can buy the house. best to be done in a lawyers trust account so that there is trust between you and every thing is above board
By MissKathleen, May 12, 2010 @ 2:45 am
My brother is going through that now also. He took a video of the house and property to point out any repairs needed in order to negotiate a fair rent to own agreement. The landlord agreed to the price based on the repairs and they worked out an agreement, which my brother had reviewed by an attorney.
By loancareer, May 15, 2010 @ 3:55 am
Generally how a “Lease with Option” works is that the landlord will consider a portion of your monthly rent payment as a down payment towards the purchase price of the house. You need to negotiate the purchase price as well as the portion of rent that will be applied.
Here are a couple of things to look out for:
1. – Do not allow the landlord to inflate your rent beyond what would be considered fair market rent. If you choose not to purchase you DON’T get that money back.
2. – Ask the landlord to share in the cost of an appraisal. You don’t want to enter in to a contract where you are paying more than the house is worth, especially in this market.
3. – Just because the landlord is applying a portion of your rent to the purchase price doesn’t make it a down payment in the lender’s eyes. You will still have to come up with something. The good news is that if you can prove your income to support the loan you can probably qualify for an FHA loan with only a 3% down payment.
4. – Most “Lease to Own” contracts end in the renter walking away without buying the property. Be very aware of this. If I can add one final piece of advice it would be this. If you were buying a home you would hire a lawyer to review the contracts, wouldn’t you? Why don’t you have one now? Aren’t you negotiating a purchase?
Good Luck!