Mr. Kevin Sucher is absolutely right.
Additonally, you will need to investigate if the mortgagee had any late payments and if so, you probably you should negotiate your Option Money.
Anita Desilva, Broker
Realty Solutions, LLC
Have it all setup through an escrow and do not give money directly to the seller. That way mortgage, taxes, insurance get paid. If you are putting a down payment what is it for? To come off the sales price in the future? If so let escrow handle it until that future time comes.
You should also have a home inspection before moving in and settle any items now not later. Also have a sales contract signed with a future close date.
Just to list a few items of risk and donâ€™t do this on your own get an real estate attorney to complete it.
But if I would be in your place I'd like to hear at least 3-4 opinions coming from different Realtors on the house you think of renting for now (thinking of buying it later). I can provide a free market analysis if you'd like. No problems.
As for the contract between you and the seller my fair opinion is that you better have an attorney specialized in real estate so you can sleep well at the time when you sign the contract and one year from now (or more) when the buying time comes. Good luck.
If you find things you don't like about the home, and you have an "out" in the agreement, then you'll likely lose some of the deposits you've given the seller. and by the way, will you have an out? There is a difference between a lease option and a lease purchase, so finding out exactly what the seller expects as far as deposits, rent amounts, and turning into a purchase at the end, is critical to answering about risks to the buyer. I would also wonder about why the seller is going this route.... is there a reason the owner is offering these terms? Is there an issue that he/she can't sell it today? Are they asking more money at the end of the agreement than they would get now? If so, that could be an issue.
There are many variables that would bring up more questions so it really depends on the terms they're offering and the specific home and situation. Always good to get legal advice on any agreements the seller wants you to sign. Some risks might be worth it if you have reasons that you can't/don't want to commit to a purchase now, so you need to understand your needs as well. Sitting down with a Realtor you trust to help you evaluate the price and terms will help you make a more informed decision as well.
Best to you,
Every rent to own, or lease option might or might not have it's "risks".
Read through any contract to make sure it is written in your best interest. Have a professional represent you.
You are going to be missing out on great low interest rates and low home prices happening right now, who knows what the future market could bring?
Read more about Mt. Tabor Real Estate http://relocationtoportland.com/2009/01/21/mt-tabor-homes-fo
And seek legal advice before signing anything.
Good luck - Nathan