Lease with the Options is the best way for you to get the best deal on the home. The best way to accomplish this is by contacting a motivated homeowner and telling them you want to rent their home with the option to buy. Also, ask them if they will give you rent credit and credit your rent payments towards the purchase price. This way you will not have to come up with a down payment, because a part of your rent payments will be credited towards the purchase of the home. FHA also know as the Federal Housing Administration Insurance a government insured mortgage loan only requires a 3% contribution from the buyer. Try to get the option out as long as possible 2 or 3 years. And, who knows buy the time you are ready to buy you may have a substantial amount of equity and down payment. This is a great way to get into a home with no money down. There are plenty of 2nd homeowners out there that have the burden of 2 mortgage payments. Just make sure you don’t get into a house with rent payments over your head. I would recommend at least speaking with a mortgage consultant first to find out what you can realistically afford as far as monthly payments. A good rule of thumb triy not to spend more than 25-30% of your gross monthly income towards your housing expense payment or Mortgage/rent payment.

Hope this helps
Thomas Martin

Hi Robert,

Just a quick question. Why can't you afford a home in Bergen County right now? I realize that owning a home in various North Jersey towns if very expensive, even for those who can afford it. I would encourage you to think about where your financial goals are before you even consider an "option to buy" scenario.

The market in North Jersey is mixed where some areas are experiencing some volitilaty, but many areas are still maintaining values even though there are more homes to choose from.

Once thing is almost certain, Bergen County will most likely remain an expensive place to live for years to come. So as you consider an option to buy, remember that taxes will continue to rise as well.

I don't know what your situation is but if you are planning to make a heck of a lot of money in the years to come and hope to increase your salary (if you are an employee of a company) by more than 10% every year (considering the rate of inflation) and plan on including bonus income as a viable income variable, then you may want to work with a real estate consultant who can help you submit a creative offer on homes that have been on the market for more than 6 months to 1 year.

Please consider that most "Option to Buy" offers allow the home seller to keep some (if not all) of the deposit made on an option if you don't excercise or make good on the option to buy.

Therefore, if you don't buy the home seller can walk away with your deposit after a specific time frame (all depends on the terms of the contract). This is just one scenario, but a very common one.

Don't get sucked into a scenario either where a small portion of your rent goes to a down payment on the home. If you do choose this method, make sure that a large portion of the rent is placed in escrow, not a small portion.

There are creative offers that can be made in this challenging market. You just need the right "think outside the box" kind of professional on your side.

Good luck with your journey and Happy Holidays.

-Carmelo Torres
ct@ctorres.com

Actually, renting with an option to buy is a far greater possibility now than it was a few years ago. A couple of years ago, if someone wanted to sell, no problem, they sold. Now, if someone wants to sell and it doesn't sell, they rent. They become "unintentional landlords." They'd much rather sell, even if the sale occurs a year or two from now, rather than just becoming landlords.

Having said, that, not too many homes are listed as "rent to own" or "lease option" or "lease purchase." A few are, and an agent can search the comments section of the MLS. Another technique is for the agent to sort all listed properties in an area by address, and pull up those that are listed both for rent and for sale. If an owner wants to sell but also is willing to rent, then it's very likely the owner will consider a lease option. Why wouldn't he?

But, going beyond that, an agent can pull up properties for rent, then pull up expired listings and identify houses that were for sale--that obviously didn't sell--and now are for rent. Same scenario as above: owner wants to sell but is willing to rent. You approach the owner with the solution to his problems.

Going beyond that: Just look at houses for rent. Not all the owners will want to sell. But some would be willing. And some certainly have considered it but figure, due to current market conditions, that they'd rather keep renting the property until conditions improve.

Want another idea: Have your agent check the MLS for properties with long DOM (days on market). These people want to sell, but their houses aren't selling. What are they going to do if their houses don't sell? Some of them are going to rent them out.

Want another idea? Out-of-town owners who are renting their properties out. Your agent can bring up the data from tax records of non-resident owners. Sort by the criteria you're interested in (neighborhood, number of bedrooms, baths, etc.). Then send them letters: "Dear Mr. _____: I see that you own the property at 123 Main Street. I'm interested in buying a property in that neighborhood, and was wondering if you'd consider selling it?"

And the list of techniques goes on and on and on. You want a property you can rent, then own? That's no problem at all.

Good luck.

Dear Robert,
It isn't common, but it is possible. Sometimes it can be arranged with a home seller, as an alternative type of financing, but usually needs to be addressed with individual owners, on a case by case basis.

Some owners will be open to this, and others will not. I know it is much more common in other areas of the country, but owners are often looking for "out of the box" ideas to help sell their home, and this could be one of them.

Perhaps there is a way for you to buy right now that you aren't aware of.

I would be happy to discuss it with you in depth, please contact me through my website link.

Happy Holidays! Sharon Kozinn