Home Buying in Santa Rosa>Question Details

Nonnie, Home Buyer in San Jose, CA

Breaking a lease to buy a house

Asked by Nonnie, San Jose, CA Mon Feb 6, 2012

We're looking for a home in the Santa Rosa area. We've been on a M2M lease in the Bay Area for the last two years with a not very nice landlord who doesn't know of our plans. Rents in this area are soaring and we've just been presented with a two year lease with a $300/month increase which we'd be willing to pay but don't want to sign for two years as we're looking to buy ASAP. When presented to us it was "take it or leave it" I can get more from someone else so we don't think negotiating is possible. We don't want to move twice but have no idea how long it might take to find, buy and move into our new home. Any creative ideas or referals?
Thanx

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11
Nonnie,

@Ron has given you some good advice regarding the legal requirements for vacating your current residence or whether you need to sign the lease. Not much I can add there.

However, I take serious exception to the suggestion that real estate and mortgage financing should be handled by the same person. I have rarely it seen it effective for the home buyer as much as it is an opportunity of increased revenue for the individual offering it. Also, I am not sure what mortgage product you are going to be utilizing; however, FHA is explicit that no mortgage professional originiating FHA loans may be employed by anyone other than FHA (including being a real estate agent). Conventional and VA do not carry the same restriction; and I am well aware that many real estate/mortgage combination company's have come up with some very creative methods to "get around" FHA rules.

There is a saying that fits this situation fairly well: "Are you a master of your trade, or a Jack of all trades?" I am sure there are real estate agents who are qualified to be appraisers and home inspectors also....would you want to buy a property that one person was selling, financing, inspecting and appraising it? A little bit of a conflict of interest I would suggest. Technically I could activate my CA DRE license and do the same thing suggested here. I just view it as a complete breakdown of fiduiary responsibility to a home buyer.

Best of luck to you! I used to live in NoCal and still miss it much!
1 vote Thank Flag Link Mon Feb 6, 2012
Good morning, Nonnie.
Here is a website that has some useful information regarding your rights as a tenant. It is important to inspect your signed agreement.

California Tenant Law - Free legal advice for California renters' rights
http://www.caltenantlaw.com/breaklease.htm

You might also look at your options for renting elsewhere until you are ready to purchase. Here is a link for Alliance Property Management in Santa Rosa: http://www.caltenantlaw.com/breaklease.htm

Also, when you are ready to look at some homes in Santa Rosa, I am a Santa Rosa native and a REALTOR in the area.

Good luck to you!

Jolene Cortright
Century 21 Valley of the Moon, Santa Rosa
Jolene@century21.com
707-477-6529
1 vote Thank Flag Link Mon Feb 6, 2012
As to financing, it has been my experience that large direct lenders such as Wells Fargo give me a slightly better rate (1/8 - 1/4) point vs. the numbers that I have gotten through any mortgage broker. I'm sure that there can be exceptions but this has been how it's worked out for me over the years. In any case, there is no reason to not also try working with a mortgage broker to see if they somehow come up with a better deal. But all of that is still a bit premature, until you two are closer to really getting serious, getting your pre-approval and starting house hunting.

I don't personally have any objection to my broker/agent also being my mortgage person. It is not important to me. All I care about is what rate I will pay for what term with X points, etc. Once you actually get under contract for the house, you'll be astonished at how many things you'll coordinate that really SHOULD be done by the agent or mortgage person. It is what it is.
0 votes Thank Flag Link Wed Feb 8, 2012
Nonni,

Recently I gave you an answer, which was immediately followed by answer by a loan agent that there shouldn't be a real estate agent/loan officer combination helping you.

However, my rebuttal to her and for your information is that, as I stated, I have been in the real estate business for over 48 years. but I have also been in the mortgage business for over 40 years, and it helps me complete a property purchase when I am able to easily track the loan process without worrying that approval will be stalled at the 12th. hour.

thank you again for hearing me out, and contact me if you need my help.

Ron Barbieri
Premiere Property Services
(707) 578-1008
0 votes Thank Flag Link Wed Feb 8, 2012
Hi Nonnie,

I'm a landlord but here in PA, not CA. Here are some resources that you should read ASAP:

http://www.dca.ca.gov/publications/landlordbook/
http://portal.hud.gov/hudportal/HUD?src=/states/california/r…
http://www.caltenantlaw.com/

I would not sign the lease as it currently stands. If you do, and break it to buy a house then you will be stuck paying it until he finds another tenant or perhaps even be on the hook through the entire lease! Ouch! No thank you!

You can request language to be added in, to provide 60 days notice to break it but he may not agree. This would be best done in person over a cup of coffee and trying be really nice, etc. Something like, "We really love it here you have been such a great landlord (white lies) but we have been thinking about getting a home of our own so we WOULD be so happy to stay here AND pay you more but we need to also be able to provide you with 60 days notice - just in case we find the right place. How's that sound?

Legally, if you do not sign the lease, then you are simply still a M2M tenant. And unless he actually provides you with 30 days written notice, he can't ask you to leave OR verbally change the monthly rental amount. This must be done in writing and it sounds like he really didn't quite do this, but rather shoved a 2 year lease at you?

Bottom line, is that he can't force you to sign that lease and you should not do so as it currently stands. Unless he is stupid, he won't simply give you the 30 days notice, without first finding a new tenant. If you want to play hard ball, you can just wait until he provides you with PROPER written notice of his request for the additional money, and then toss it back - in writing - that you are willing to pay X. Things are not Agreed-to - until they are in writing. And, until he literally writes that he wants you out with a full 30 days notice ... you are protected.

I'd first try and meet with him, sugar him up, and be honest. If he's a jerk about it ... well - then you can just keep paying him what you have been or $300 more or whatever. And put in the MEMO line on your check "March Rent - paid in full". If he cashes that, then he is agreeing that that amount is proper. Be smart!

I hope this helps and wish you the best of luck!

J.
0 votes Thank Flag Link Wed Feb 8, 2012
I would suggest that you contact your local bar association for your county court system. They often have information and referrals regarding tenants rights. That sounds like a very steep increase in rent, and you should check if there are any ordinances about how much they can raise your rent at this time. If you are looking for real estate in Sonoma County, please check out the search engine in my website below, as you do not have to register to use it! Good Luck,Terry Bell, Realtor, Santa Rosa, CA
0 votes Thank Flag Link Wed Feb 8, 2012
Dear Nonnie,
Just to get your story right: you have rented this house for 2 years on a month to month lease and now the landlord wants you to sign a 2 year lease? You are not moving to an other rental? That sounds a little strange, has there been a recent change in property managers?
And yes countering to pay the $300 increase but staying month to month is a good advise, life happens and it's hard to make a 2 year commitment. I am surprised that a property manager in San Jose area would even ask for this -> people change jobs all the time.
If you have been paying your rent on time it would sound strange to me a property manager not accepting your proposal.

Mirjam de Rijk
CENTURY 21 Alliance
Santa Rosa
0 votes Thank Flag Link Mon Feb 6, 2012
Since you have been in a lease for more than a year your landlord would have to give you a 60-Day notice to vacate, whereby you only have to give your landlord a 30-Day notice. You do not have to sign a lease if you do not wish to.

I am a realtor in Santa Rosa, and have been in the business for the past 48 years. You can search out all properties listed on our local multiple listing service on my web site: santarosahomefinder.

Also, I am a loan broker with one of the major mortgage lenders in Santa Rosa. So, if you need to be lender approved for a home purchase, please contact me at your earliest convenience at (707) 578-1008. This way I can have you pre-approved rather quickly, and at the lowest current rates.

Thank you, and I will look forward to helping you soon.

Ron Barbieri
Premiere Property Services
(707) 578-1008
0 votes Thank Flag Link Mon Feb 6, 2012
Hi, You could always see if the landlord would be willing to do a month to month lease. I would get pre approved for a mortgage and meet a real estate agent to see a) what banks are willing to lend you and b) knowing what the banks will lend you, will you find a home easily enough or will it be tough. Your expectations for a home will also play a big part in what you will find. /If after doing all this it seems you will be able to make this happen wuickly enough, you can decide how to deal with the landlord.


Sincerely,

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Mon Feb 6, 2012
Hello Nonnie,

My thoughts are if you are ready, willing, and able to buy in the Santa Rosa area, now is the time. Depending on your price range, will depend on how long it might take to find, buy and move into your new home. Signing a 2 year lease with the intention of buying ASAP in the Santa Rosa area may not be in your best interest.

I understand the challenge of having to move twice! Moving is costly and a lot of hard work. However, I suggest you consider a short-term rental in this area so that you can spend some time here and feel confident of the area you choose to buy your home. There are so many wonderful spots in Sonoma County, and you might find something in Windsor, or Rohnert Park . . . or the west side of Santa Rosa versus the east side.

We can assist you in your home search and happy to provide you referrals to Property Management Companies. We also have a great network within Coldwell Banker --- often times we can help our clients just through our resources within our organization.

We are happy to visit with you should you wish to discuss further. Just give us a call!

Teri Shaughnessy
"Your Home Team Advantage"
Broker, Associate
707-331-0366
Brokered by Coldwell Banker
0 votes Thank Flag Link Mon Feb 6, 2012
In most areas, it is cheaper to buy than it is to rent.

What if you offered to pay the $300 extra per month but stay on a month to month lease? Do you think the landlord would go for that?

In most states, if you break your lease while under contract, you are responsible for paying the monthly payment until 1) your lease is finished or 2) until the landlord gets the property rerented and the landlord must make sufficient effort to rerent the property in a timely manner. (by the way, this is not legal advice, just my understanding).

Read your month to month contract (or old contract) and see how much notice he must give you to move out. Some say 30 days, some say 60 days. If you have not yet started the home buying process, this is probably not enough time to buy a house (depending on your particular circumstances). See if he can agree to a month to month lease for the same rent he wants to charge now and start looking for a home ASAP if that is your ultimate plan. Get with a licensed real estate agent in your area and a good mortgage lender and get going. Interest rates are ridiculously low right now and you can get some great deals.

Best of luck to you,

Brian Rayl
Keller Williams Elite - Dallas, TX
0 votes Thank Flag Link Mon Feb 6, 2012
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