Home Buying in 44256>Question Details

Theheimer, Renter in 44256

i want to buy our lease option home now but original agreement is higher than current value

Asked by Theheimer, 44256 Sat Jan 15, 2011

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I think if you really like the house you have the right to pay for a fee for appraisal of the house and modify or write a new contract at that appraisal value. Any mortgage will only give you a loan based upon the appraisal and if you don't exercise your option they will get lower purchase price from the next tenant. Get a really good real estate attorney in your area and they can make sure you are not on the hook for past taxes, or liens and that you get clear title.
0 votes Thank Flag Link Sun Jan 16, 2011
No lender will allow a home purchased over value. Either seller agrees to lower price appraised value OR search for another home .

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sun Jan 16, 2011
Rent to own, lease purchase or rent to buy are all good deals for a seller but rarely workout for a buyer. Consult an attorney most lease to own contracts are option contracts if you do not excerise the option you forfeit the deposit. If you renegoiate the terms you may forfeit the deposit even if the property does not appraise.

This is not a good choice for you as a buyer. Run from anyone who suggests that you rent to own. Buy when you qualify for a mortage do not get into a rent to own contract if you are unqualified.

The rent to own contracts are a sellers tool to get people into houses. The process is that you will sign a contract saying that you will buy the home someday in the future 12 months-18months. You will put down a sizable Non-refundable option deposit which will be applied as a downpayment when you buy when and if you buy on time. Normally an 8%-10% deposit. At the end of the contract if you don't buy the house for the original terms you will lose your deposit. Now you get to start all over again after losing $5,000 to $10,000 it's better to rent until you are ready..

Best of Luck,

Thank you,
Bill Carey, Broker/Realtor
Certified Short Sale Seller Specialist
Cell 704-905-0740
Fax 866-343-5945
Bill.Carey@HendersonProperties.com l http://www.HendersonProperties.com
0 votes Thank Flag Link Sun Jan 16, 2011

So if your information is correct you would be purchasing a property that is already "upside down" and a candidate for a short sale, essentially, taking over someone elses problem......

Our best advice is to proceed with caution.....have an appraisal done to varify your concerns, and work through any agreement with the support of a real estate attorney.

Good luck,

0 votes Thank Flag Link Sun Jan 16, 2011
You are in the control position with a lease option to buy. First get qualified as a buyer. Get pre-approved before you start any neogociations. You may have to renegociate your lease. Second research the neighborhood for listed homes for sale and sold homes of simular type (comparable) properties. Document and compare these comparison homes for thier simularities and non-simularities. Third give your landlord a 90 day notice to move at the end of your lease and seperately give them a written purchase agreement (your offer to buy). To much talk is unproductiive. Your landlord has two options. Accept your offer; or reject your offer (risk a vacantcy). A counter-offer from your landlord is a rejection of your offer and you have not obligation to accept his counter-offer. The simple alternative is to call a Realtor for advice.
0 votes Thank Flag Link Sat Jan 15, 2011
Good evening Theheimer.

Not a lot of info to go off of and a lot of options already mentioned.

The first thing you need to understand is the terms of the lease option. That is what you are currently obligated to. As has been mentioned, a real estate attorney can review and give you legal advice as to what your legal obligations and options truly are if you have any questions.

Once you fully understand the legal issues behind your decisions you will be making, you can then determine how to best proceed. Either with exercising the option or renegotiating it with the property owner. If you aren't comfortable with the renegotiated price, then you also will know what ramifications are going to be if you do not exercise the option to buy.

You indicate the original agreement is higher than current value.....by who's determination? An appraisal will need to be done for you to obtain a mortgage and purchase the property. If it doesn't appraise for the agreed price, you (or anyone else) will not be able to obtain a mortgage unless you bring more cash to the table.

Have you already discussed this scenerio with the property owner? Sometimes just good old communcation can answer a lot of questions and give you an idea if this situation will be able to be dealt with or not. How did you negotiate the initial lease option? Was there a Realtor and/or an Attorney involved? If you need a third party to facilitate the renegotiations that would be the first avenue to pursue.

Good luck!
0 votes Thank Flag Link Sat Jan 15, 2011
My suggestion would be to get an appraisal, then talk with the seller. If the seller really wants to sell now, the appraised value is all he is likely to get from anyone. Plus you are already there, so there is no marketing time when he wouldn't be getting any payments if you move on.
Good luck.
0 votes Thank Flag Link Sat Jan 15, 2011
You can just approach the owner of the property. I am assuming you dealt directly with the owner of the property. As a past landlord myself, most of the time attempt to keep the tenant (you) and I'm sure your a qualified buyer. Why would the landlord let you walk away, he should not. Unless you are both to far apart, or one or both parties are unreasonable or just plain greedy. In this market, nobody knows what the prices are going to do, if interest rates go up prices usually fall. With the job market lagging and the quote official unemployment around 10% last I heard, ask yourself how secure is your job/s. There are a lot of homes for sale including short sales and foreclosures which can be purchased for thousands off market price. The banks are not in the real estate business and sooner or later their going to dump them.
0 votes Thank Flag Link Sat Jan 15, 2011
I would have a real estate attorney review your contract and discuss your options with you.
0 votes Thank Flag Link Sat Jan 15, 2011
Has a current appraisal been done on the property recently?
0 votes Thank Flag Link Sat Jan 15, 2011
Does your contract allow any renegotiations, have you approached the seller...review the document, or consider having your agreement reviewed by an attorney who specializes in real estate, see exactly what options you may have....
0 votes Thank Flag Link Sat Jan 15, 2011
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