Home Buying in 02770>Question Details

Jim L., Home Buyer in 02770

What is a fair amount of crediting of lease payments to a purchase price if not negotiated up front?

Asked by Jim L., 02770 Tue Apr 7, 2009

I am currently leasing a brand new condo that the seller and I verbally agreed could turn into a purchase, without an option to buy clause, up front money, and agreed upon purchase price in the leasing agreement. What would be a fair amount of rent paid that could be credited toward the purchase price from the seller? Since this condo is now used should depreciation be factored into the original asking price when the lease started?

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I have to agree with the previous post, get yourself a qualified real estate attorney who has alot of experience with lease to own type contracts. They'll need to consult what you have in writing as well as document any valid verbal promises.

You need to involve your attorney very early in the process to properly protect your interests. To answer your question though, I'd say as much as the owner is willing to agree to. You don't really say how much your lease terms are, what's included in the lease etc. If you've been paying all the expenses (utilitites, water, trash, condo fee, parking etc.) then you could expect a greater amount to be credited. If the owner has been carrying the fixed costs of the unit (insurance, water, taxes, condo fees, parking etc.) then there might be less room to negotiate.

Your depreciation argument might get countered by the owner saying your directly financially responsible for the depreciation (wear & tear if excessive (this is subjective) etc.). You might want to research how much they paid, how much they financed and try to get a grasp on what the owners financial position is, coupled with the current market value & your ability to get funding.

Lots to cover, more info really needed to flesh out your questions
0 votes Thank Flag Link Sat Apr 11, 2009
"fair" is whatever the buyer and seller agree to and find mutally beneficial. As every situation is different , as are every buyer and seller there are no "norms" on these transactions. Might I suggest however, that what ever the two sides (buyer/seller) come up with is handled with an attorney. Yes, even if you are related !

An agreed purchase price is agreed to at the onset, not after the buyer's wear and tear on the property. Therefore, the buyer does NOT benefit from financially from his own wear and tear. You may want to consider some protection for yourself, that if in fact they eventually back out of this agreement that excessive wear and tear would be financially addressed, once again, in writing through an attorney.
I hope this works well for you, Let us know

Deb
0 votes Thank Flag Link Fri Apr 10, 2009
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