Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
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,
Bill Carey, Broker/Realtor
Certified Short Sale Seller Specialist
Bill.Carey@HendersonProperties.com l http://www.HendersonProperties.com
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.
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.