Rent vs Buy in Brick>Question Details

Michael Palm…, Home Buyer in 08724

rent with the option to buy, or lease with the option to buy....

Asked by Michael Palmeri, 08724 Sun Dec 27, 2009

have stable job, good income, lacking downpayment, newly divorced, establishing myown credit. Any help would be greatly appreciated, I want to own a home of my own so bad. I am looking in the Brick, NJ area

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If you don't have enough in your cash reserves for the down-payment and other closing costs, then a lease-option could be a great way for you to (re-)establish your credit (via your rental payment history), lock the price on a home that you want in today's dollars, save up a down-payment for that home, and move in today.
1 vote Thank Flag Link Mon Dec 28, 2009
Blunt alert:

If you have no down payment, you are better off renting for now and not letting your wants get the better of your needs. If you have no down payment, then you also have no payments for the myriad of expenses involved with homeownership, many of them large and unexpected.

Part of the problem that led to the government nationalizing our economy was caused by bad individual decision making. For example, buying a home with no money down.

Do what is best for yourself: Save a down payment, demonstraing sufficient self-generated cash flow, and buy when the time is right, the FICO is right, and your ability to repay your own loan is right.

Buying a house with no down payment in this economy is irresponsible. Realtors and mortgage brokers that facilitate this are also part of the problem.


Marc Paolella
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1 vote Thank Flag Link Mon Dec 28, 2009

Currently I am working on a property in Middletown, NJ for rent to own. Not sure if this would be of interest.

Best Regards,

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0 votes Thank Flag Link Tue Dec 6, 2011
I cannot reiterate Marks comments enough about affordability when purchasing. However, that being said, you sound like you feel you can afford a lease with option or lease purchase, so here's my advice:

Check out the differences between the two types of leases. Here's a good place to start:…

Depending on your financial situation, the sellers motivation, and current market conditions, one might work better for you than the other.

Then, once you decide which way you want to proceed, there are options available to you when preparing your offer re: down payments, % of rent applied to purchase, etc. A good attorney can advise you.

Good luck! If you'd like a list of sellers in a certain price range who would consider a lease/purchase or lease/option, email me and I'll send you out some listings to review. There aren't many available as most sellers want and or need the money they get by an outright sale to move on to a new place, too.
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0 votes Thank Flag Link Mon Dec 28, 2009
If your credit score qualifies you to purchase, I'd suggest looking into buying now with a USDA Rural Development loan. That offers 100 % financing. I don't believe that the loan program is available in Brick, but it is available for parts of Toms River and Berkeley Townships, as well as all of Jackson.

Laura Giannotta
Keller Williams Realty - Atlantic Shore
0 votes Thank Flag Link Mon Dec 28, 2009

My initial thoughts were to recommend you look into a 3% down FHA loan as I live in Brick and do business in Brick, so I know that you can find a condo/townhome and possibly a home b/t $150 (townhome) to $300k.

However, Marc makes some excellent points, especially regarding the add'l unexpected expenses of homeownership. You'll need a cash reserve to keep up with these types of items.

Love and Peace,
Francesca, Realtor, ePro SRES
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0 votes Thank Flag Link Mon Dec 28, 2009
There is a big difference between a "lease/option" agreement and a "lease/purchase" agreement. Both can accomplish the same result but each comes with advantages and disadvantages. Let's meet and talk about your needs.

Thomas J. Smith, Broker Associate
Remax At Barnegat Bay - Manahawkin
31 N. Main St. Manahawkin, NJ 08050
Direct Line: 609-978-3623 Fax: 609-978-8625 Text: 609-709-1429
Email: Web site:
0 votes Thank Flag Link Mon Dec 28, 2009
Hi Cindy,

I'm not familiar with the NJ real estate laws. However, in Florida, when one rents/leases a home with option to purchase, it does not belong to he or she until the closing of the contract. Since most agents/Realtors are not attorneys, I would suggest that once you work with the agent/Realtor in finding a home you would like to rent/lease with option to purchase that you contact a real estate lawyer and have he or she do the paperwork for you. Your agent/Realtor will, most likely, know of one.

Good Luck,
Jackie Youngblood
Keller Williams Tampa Properties
0 votes Thank Flag Link Mon Dec 28, 2009
Well, you won't necessarily own it just because you have the option.
0 votes Thank Flag Link Sun Dec 27, 2009
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