Home Buying in Wesley Chapel>Question Details

Bc, Home Buyer in Tampa, FL

Ask a question...Hello, what are your thoughts on rent to own? Thank you. Bc

Asked by Bc, Tampa, FL Tue Apr 17, 2012

Seven oaks or westchase?

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5
Ron Thomas’ answer
Be very, very careful:
You may think that Lease/Option is your path to home ownership;
What may be in store for you may be something different:

There is no "boilerplate" contract for a Lease/Option; it may be written any way you, the Seller and some lawyers may chose to write it.
The Monthly payment, the amount allocated to the down payment, the term of the Option, the Selling Price, as well as the interest rate; all of these things should be decided now, today, for a set date in the future.
Do you know how much the property will be worth in 2015 or 2017?
Do you know what will be a good interest rate in the future?
What allowances will be made if you are not able to execute at the time proscribed?

In otherwords, how desperate are you and do the Sellers know it?
1 vote Thank Flag Link Tue Apr 17, 2012
Most, not all people seek a lease option because they do not qualify for traditional financing. By trying to work around the system that is in place to protect them the level of risk and probability of failure increases dramatically. Not one “lease option buyer” I have ever spoken to understands the transaction nor have I ever provided an end loan to convert anyone to a traditional mortgage from one of these puppies. The desire for home ownership is almost an obsession in our country, driving people to take unwarranted risks.

Most of the people that are trying to use this type of transaction to circumvent the traditional process have asked a loan officer how long it will take to be eligible for a regular mortgage. The LO always gives the best case scenario with the shortest timeline. Whatever timeline you were given, double that and then add 6 months to a year to that number, only then do you have a safe and realistic target date.

Yesterday a LO in my office was asking for help trying to sort out a poorly written lease option. The buyer and seller agreed to use a portion of the rent for down payment, not automatically allowed when it comes time to arrange permanent financing, rent is rent, down payments are down payments. It doesn’t matter what the parties agree to, the lender must follow the underwriting guidelines.

Protect yourself and your money, research before you jump in, these transactions are not as simple nor are the regulated by the Feds like a mortgage, you are going in alone!!! Information in the link below may protect you from harm. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
2 votes Thank Flag Link Wed Apr 18, 2012
BC,
When weighing options for the home owner, I point out that Leas/Option or Rent to Own scenarios are a hugely profitable situation for the homeowner. This is a concession, you as a buyer will need to understand. The potential profit is breathtaking, and yet these deals are done routinely.

If the owner is offering a 'sequential' property, the likelihood of you ever owning the home is ZERO and your deposit will go to 'Hip National Bank.

If the owner is an investor and this is exit strategy #3, you have a opportunity to become a home owner.
If the owner is not an investor and has a failed sale on their hands, you may have a good opportunity to get a home that you will actually buy. If they are using one of those 'DIY' contract forms be aware, these documents are of little, if any, value. The homeowner will be betrayed and you will be in a state of limbo.

Read, read and read the contract. There are essential elements to identify to protect your investment. The exact words used are critical. Have someone review the contract with you if you are unsure of how this process works. Be aware, this is a business, not a hobby.

This is a very viable option to home ownership. Be careful and if you are not experienced, get some help.
Annette Lawrence
Broker/associate
ReMax Realtec Group
727. 420. 4041
1 vote Thank Flag Link Wed Apr 18, 2012
If you're looking to a rent with an option to buy because you can't buy now, make sure you really understand what you're getting involved in.

While you and the seller are free to come up with any kind of creative contract...........In a traditional rent w/ option to buy - there is some non-refundable option money given the seller in the event you, the buyer, don't exercise your "option" to buy.

The seller must sell at the agreed upon price, but the buyer doesn't have to buy............that's why the seller is given the non refundable money.
This may be in the form up an upfront deposit.......or an amount paid monthly over and above the normal rent which would then be applied to the sale price should you buy at the end of the lease term. If you don't buy the home, that additional money may be forfeited

My problem with this is....if you can't qualify NOW - you better make sure whatever issues you have will be cleared up, and you will qualify when the time comes, or you won't be able to proceed.

As Ron mentioned, the sale price is usually decided NOW.......in this market I wouldn't want to come up with a sale price for a year from now........besides, you don't know what the mortgage rates will be then, either.

I suggest you rent and save your money for the down payment, and then see where you stand at the end of your lease.........if the seller wants to sell, and you CAN buy, then strike a deal at that time.
Just my opinion.........Whatever you do, I advise you to make sure a real estate attorney looks over any contract before you sign it.

Good luck!
1 vote Thank Flag Link Tue Apr 17, 2012
The problem with rent to own, is that really either party can walk at anytime. If seller cancels, he has to refund deposit, if buyer cancels he forgoes deposit. My advice is just to purchase.

Westchase or Seven Oaks.....well I'm partial to Seven Oaks. Much more affordable, lower taxes, great schools....I've lived here for 8 years, and I love it just as much today as when we purchased 8 years ago. In fact once I saw Seven Oaks, I told my husband I either live here or I'm not leaving NY.
I also do a great deal of my business in Seven Oaks, I know the floor plans, neighborhoods and the different builders like the back of my hand.
Please call me and we can talk.
Stacey Handman
RE/Max Premier Group
Wesley Chapel Fl 33544
813-469-7671
slhandman@verizon.net
1 vote Thank Flag Link Tue Apr 17, 2012
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