Home Buying in Philadelphia>Question Details

Anthony, Home Buyer in Philadelphia, PA

Would it be beneficial for a rent to own agreement to be made with my landlord if the house is not for sale?

Asked by Anthony, Philadelphia, PA Fri Jan 2, 2009

Right now I am renting a house in Philadelphia. I have been living in it for a few years. I like the house a lot. I actually want to buy the house but its not for sale. Do you think that my landlord would go for doing a rent to own agreement with me? Also my rent is pretty high, I thinking that I can actually get my leasing payments to be less than what I am paying now for rent. Would this be possible?

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Hi, Anthony,

My guess is that if the home is not for sale right now, the owner may not be interested in discussing a sale with you. While the Philadelphia market is not in as bad shape as many other parts of the country, we are certainly not in a seller's market right now. Picture yourself as the landlord - he owns the home, has a good tenant who pays the rent. Why sell now? Unless he really needs the money it is in his best interest to wait until prices start to rise again.

It never hurts to ask...so if you do, you should also consider:

1. Getting a professional appraisal to determine a fair selling price based on today's values.

2. Make sure that a portion of your rental payment goes towards the downpayment that you will need.

3. Be specific about the actual settlement date, mortgage terms, inspections, etc. If you lay the groundwork carefully, you will have more success when it is finally time to go to settlement.

Please let me know if I can help you with anything else.


Carol Murray Cei
ReMax Millennium
215-643-9661
carolcei@remax.net
0 votes Thank Flag Link Fri Jan 2, 2009
Anthony,

It is possible! You can ask your landlord if he or she would consider selling the property to you. BUT... and this is the important part for you... Before you make any real offer you need to do a little due diligence. Your question, "would it be beneficial" depends on if you can purchase the home at a great value without the property going on the open market where it may be sold sooner than you are ready to buy and at a higher price than you would be willing to pay.

1) Determine the value of the home based on comparable SALES in the immediate neighborhood.
2) Determine the average rental amount for similar properties in that neighborhood.
3) Determine how you would structure your offer to purchase. (length of time, rent amount and reimbursements if any, locking in a fair purchase price, allowing for extended home inspections, mortgage contingencies... the structuring of the offer may take the advice and service of a Real Estate professional or lawyer.)
4) Do not just use a mortgage calculator on-line as your source for accurate mortgage calculations. Talk to a lender to make sure your finances are in order. Make sure the lender (or a Realtor if you decide to work with one) gives you a good faith estimate so you know approximately what your mortgage will be. (Homeowners insurance and transfer taxes, real estate taxes, mortgage fees and title fees included.)

If your landlord is interested in selling to you and you both come to a satisfactory agreement it is possible and may be beneficial as long as the terms and the structure of thesales contract provides you and your landlordand with a fair and acceptable deal that protects both of you.
0 votes Thank Flag Link Fri Jan 2, 2009
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