Michael David, Home Buyer in Mount Sinai, NY

A friend told me in some cases you can work out a Rent to Buy deal. How does this work and who is the deal?

Asked by Michael David, Mount Sinai, NY Sun May 24, 2009

made with, the lender or the property owner?

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5
You usually find the Rent to Buy with the brand new condominiums that they have built. And there are plenty of them in Brooklyn, LIC, etc. Depends where you want to live. Good Luck, Liz
0 votes Thank Flag Link Sun Aug 8, 2010
Very rare that you will find a landlord who is willing to rent with the option to buy; there is nothing for the landlord to gain in this scenario. In today's market you are better off buying a starter property within your budget. There has been no better time to time with low interest rates, lower priced properties and if you are a first time buyer don't forget the tax credit. Why not consider speaking to any loan officer and see what if anything is affordable to you.

Anna
917-576-5376
abrocco@laffey.com
0 votes Thank Flag Link Mon May 25, 2009
Michael in most cases a bank or lender selling a bank foreclosure or bank owned home is not willing to rent the property, they are looking for the best possible price in the quiclest amount of time. Your best option is dealing with a seller who is in a position to do a lease purchase. Basically there are 2 parts of the negotiation, you first need to get prequalified for a loan, you need to know what price you can afford, what your monthly payment will be, what you need to do to get a loan when the leas eis up and how much time the mortgage broker thinks you will need. Then you can negotiate the lease and the purchase. Sellers will then credit you back money for closing costs and or down payment if you do purchase. this amount is negotiable but you should ask your mortgage broker what the mortgage company will allow so you dont get too much or not enoough credit. Good luck with your search.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon May 25, 2009
Michael,
I'm not sure if you mean rent with an option to buy? In NYC these are very uncommon but I actually heard about an apartment in Manhattan where you could either buy it now or rent for a year and then have the option to buy it or the owner would put it back up for sale.. If you are interested let me know and I will track it down for you.
(I'm not sure about the details but I think they were willing to credit you something towards the purchase too)
0 votes Thank Flag Link Mon May 25, 2009
here are the basics:(You negotiate with the owner)

1. you will put down a (non refundable) deposit usually 10% of purchase price but negotiable
2, you agree to lease the house for a specified time(usually 2 yrs) at a rent that must be higher than market rate
3. your deposit & extra funds are placed into an escrow account to build your down payment
4. At the end of the lease period you go to a lender and get financing
5. During the lease period you are responsible for taxes,insurance & maintenance
6.The owner holds the mortgage & deed until you close
7. if you do not go through with the purchase you forfeit your escrow funds
8. if you miss even one payment you can be held in default which will wreck your credit and you can be evicted in a matter of days,depending on how quickly the court system works in your area

if you are contemplating doing this,i urge you to work with a local agent who will look out for your best interests. if not done properly,you stand to lose a lot of money
0 votes Thank Flag Link Sun May 24, 2009
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