Home Buying in Carlsbad>Question Details

Gigi Drummond, Renter in Carlsbad, CA

I would like to do a lease/purchase on a house in Carlsbad that is at least 5bedrooms, 4baths. Is there is?

Asked by Gigi Drummond, Carlsbad, CA Tue Jul 21, 2009

an agent willing to help me? I would also like to procure a home by paying off the past due amount and assuming the payments on the home loan - provided that the owner signs the property over to me. This will help me acquire a home, and save someone from the horrible foreclosure process. Can someone help me please?

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Gigi,

Patti is someone we respect. Much of what we would say goes to her points.

If you choose to pursue this, PROCEED WITH CAUTION.

Best regards,

Mark and Kari Shea
San Diego Real Estate Experts
Foreclosure, Short Sale & Investment Specialists,
Development Opportunities & Traditional Real Estate
0 votes Thank Flag Link Tue Jul 21, 2009
Gigi- Just a few words of caution about both types of purchases. I get a number of calls a month with people asking me about lease options from answering past questions on this forum. One horror story that I have been told by a few different people is that they were purchasing through a "lease option"- put money down, often paying above and beyond normal rent in the area to have some $$$ applied toward their purchase at the end of the contract period. Suddenly, WHAM! They are served with papers that the house has been - or is going to be-- sold at auction, due to default on the part of the owner. One woman had put over $18,000 down, and was paying more than $1,000 each month ABOVE the owner's mortgage amount- only to be thrown out on the street! Not to mention, she had done work inside the home, because she considered it "her home" Gee, what do you think the chances are of her ever seeing that money again????? So, use EXTREME caution in getting involved in a lease/option at this stage of the game. You need some sort of safeguards on your down payment money, and also to be assured that the money you pay is actually going toward the mortgage.

Some people have thought that in this case, the best way to be safe is to pay the mortgage directly....however, depending on the loan, if it is not an assumable loan- the mortgage company can decide that you have, in essence, "assumed" the loan- and call the loan. (Which also covers a bit of question 2 you have. FEW loans are assumable- it's not just that easy to "take over" payments. You need to read ALL of the fine print in the original loan docs- or have an attorney do that- assuming that the people you are buying from have those documents on hand....)

The 3rd caution- in a lease option- how do you know that at the end of the 1 year contract that the home you are buying is going to be worth what you agreed to pay on it? AND how can you be certain that you will qualify for the loan at the end of the year? I have had numerous people call me stating that "they were sure that at the end of a year the bank would see that they could pay and give them the loan...." and guess what? NOPE! Now the seller has their down payment amount, and by contract doesn't have to give it back, they have any and all money that was above the normal rent- and you, they buyer now have no valid contract! How's that for an expensive lesson? Not only financially, but emotionally. You have invested yourself, your money, and usually a lot of sweat equity- and now don't get your home!

I don't mean to sound like a big downer, but in today's financial climate, with desperate sellers, difficult banks, the ability to qualify changing by the day- you can be taking some big risks here.

Most of the big companies- Prudential, Coldwell, etc. won't even let their agents get INVOLVED in lease options, because the chance for litigation is so high.

It would be my suggestion that if you have enough money to make your 3.5% down payment, and can qualify to buy- buy. If not wait. The timing isn't right for doing creative financing, when at the end of the day you may not end up with the home.

Patti Phillips
"Advice You Need, Attention You Deserve"
800-680-9133 or 619-507-2100
0 votes Thank Flag Link Tue Jul 21, 2009
There are a few lease/purchase options out there.

My e-mail address is sabinao@coldwellbanker.com, shoot me your e-mail and I will gladly forward you a few of those properties to view at home.

Should you have any questions then, you can call me directly.

Sabina O., Reator
Coldwell Banker in Olivenhain
0 votes Thank Flag Link Tue Jul 21, 2009
Hi Gigi,

There are many pitfalls in what you are seeking. The largest is to find a home of that size, in that area with an assumable loan.

If you would like to discuss it, you can e-mail us through our Trulia profile.

Best regards,

Mark and Kari Shea
San Diego Real Estate Experts
Foreclosure, Short Sale & Investment Specialists,
Development Opportunities & Traditional Real Estate
0 votes Thank Flag Link Tue Jul 21, 2009
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