Home Buying in Staten Island>Question Details

Anna, Other/Just Looking in Staten Island, NY

Rent to Buy Condos/Townhouses

Asked by Anna, Staten Island, NY Thu Aug 30, 2012

I'm in the process of looking for a condo/townhouse in Staten Island and wondering how uncommon rent to buy options are and how they would listed? Any key words I should look for or just simply "rent to buy". I've seen one or two on the island in not so ideal areas - Is this normally where they are listed? I'm very new to the real estate game so any advice would be great!

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I hope you don’t find one, I have never known a “buyer” to succeed using this method. Don’t put up a lot of money on the front end. A lease purchase is probably not what you expect. Every single person (tenant/buyer) I have spoken to that has done one of these in the last couple of years have lost money, one guy lost $50,000 another lady $25,000 and the list goes on and on. Rent to own is probably not what you expect. In this type of transaction the underlying assumption is the seller will be able to perform in addition to the tenant/buyer. That is a very big what if, sellers are not subject to the same federal regulation as banks, do you really know the seller well enough to give them your hard earned money? I have discussed this in the blog entry linked below. Most of the sellers interested in entertaining one of these transactions will already owe money against the property so they will not (should not) want to record any contact that might trigger the due-on-sale clause in their mortgage. Unrecorded contracts are difficult to protect should something happen to the seller, divorce, illness, death just to mention a few. Other entries in my blog will also shed some light on the subject. I hope my comments give you enough to think about so you do not get hurt, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
1 vote Thank Flag Link Thu Aug 30, 2012
It is always preferable to own, if you speak to a lawyer with a proposal from a landlord, you may find that the rent could subsidize for a downpayment. Homeownership is facing new challenges, and creative financing is a viable consideration. I can offer you resources to speak with financial advisors, mortgage brokers who could provide you with an array of possibilities. Feel free to contact me, and I will help you solve the questions to you can begin your new life on the up-tick. All the best, Sharon Sullivan

Claire Properties
3119 Richmond Road
Staten Island, NY 10306
718-524-4424 Office
917-750-6222 Direct
1 vote Thank Flag Link Thu Aug 30, 2012
Hi Anna, you're right in your assessment that there aren't many such listings in Staten Island. It would probably be easier to buy one outright. Many of them will qualify for FHA financing with a low downpayment of 3.5%. Let me know if you'd be open to it. Chris Burdzy, Leader Properties 917.586.3142.
Web Reference: http://www.718forsale.com
1 vote Thank Flag Link Thu Aug 30, 2012
Hello Anna, Rent to buy may also be called Lease to Buy; Renters pay a certain amount each month to live in the house, and at the end of an agreed upon period they have the option to buy the house. Each month of rent they pay is income for the seller, while a portion of it goes toward a down payment to eventually buy the home. Be aware that many contracts in rent-to-buy situations disallow late rental payments from counting toward an eventual sale. People with on time payment issues might lose equity when making late payments. Before you enter into this sort of arrangement talk long and hard with your real estate attorney, consider all the liabilities, and have a complete understanding of what's involved. Rent to buy can be helpful, but shouldn't be entered into by anyone who isn't serious about eventually buying the home. Rent-to-buy should be part of your plan to own a home, otherwise it will end up costing you more money in fees, and above-market rent payments
0 votes Thank Flag Link Sat Sep 1, 2012
Dear Anna,
When you are ready, feel free to be in touch. As a first time buyer, and with a decent credit score, I will assist you in setting you in a position where you might just find the perfect place without the issues involved with rent to buy options. As I stated, we would have attorneys and financial advisors involved, as well as mortgage brokers. Your security is key. Properties on Staten Island are in a wide range of prices, in all neighborhoods. I encourage you to explore your options, any pitfalls would be brought to your attention, and you just might surprise yourself and find a place you could afford and love. I wish you the best, and admire your willingness to project and begin planning for your future. We are connected with the best, and talented, experts you will need. We are here to empower YOU. As New Yorkers, the global epicenter of banking, we are obliged to be "in the know", too much info to throw around in a blog. When we meet, we will make sure you learn all you will need to know, Now, you go forward and enjoy your weekend.
Warmly,
Sharon Sullivan
0 votes Thank Flag Link Thu Aug 30, 2012
Jim -

Wow - If that's not an eye opener I don't know what is! Great stuff on your blog. I guess my lack of knowledge definitely blinded me from seeing all of the negatives involved in such transactions. My fiance and I have good credit however, we have never applied for a mortgage and are in our late 20's so I am not sure if we would get approved for one. That is the main reason why we are exploring all of our options before we start our search to either buy a home or rent if necessary. In the "renters" eyes, who wouldn't want to have an option to buy? It's ideal if this were a perfect world. But it's not so thanks for the insight and I appreciate your response!
0 votes Thank Flag Link Thu Aug 30, 2012
Sharon - Thanks for your reply. We would definitely prefer to own and are more than open to discuss creative financing options that are safe and will help us get a kick start to our new life :). I have added you to my contact and will reach out to you in the near furture to discuss this further.

Thanks again and have a wonderful holiday weekend!
0 votes Thank Flag Link Thu Aug 30, 2012
Hi Chris-

Thanks for the useful information! I am not quite ready to buy at this moment - getting married at the end of next year so I will be starting my search in a few months. Just trying to educate myself on what my options are and the best route to take.

I appreciate your feedback - Feel free to send this newbie as many tip as you'd like!
0 votes Thank Flag Link Thu Aug 30, 2012
Lease/Option
You are desperate!
Your Credit or Finances, or both, will not allow you to go the conventional route:
You need the Seller to help you out!

The Seller will know it, and you are going to pay dearly for this service:
There aren't too many altruistic Sellers out there.

The terms that can be written into a Lease/Option can be dangerous to you:
How long is the Option period?
How much money are you putting in to the Option?
What happens if you are not able to execute the Option?
How do you know what your financial situation will be 2-5 years from now?
How much is the rent in the meantime?
Who will be responsible for maintenance and repair in the meantime?
What will be the Market Value of the home in 2-5 years?
What will be the Selling price 2-5 years from now?

This is the Ultimate Caveat Emptor!
0 votes Thank Flag Link Thu Aug 30, 2012
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