There may be many reasons why your sisters house didn't sell for $298,500. Just because your sister want to sell it to you for $285,000 doesn't mean that you have yo purchase it for that amount and put yourself in a financial jeopardy. There are many things involved in purchasing a home. If you have any questions please contact me at email@example.com at your convenience and I will be happy to help you.
You don't mention how long ago your sister purchased her home. As others have indicated, you need to determine the "fair market value" for the home. In this market many homes have dropped 10 to 20% in value. I recommend you hire a "fee appraiser" to provide you with a valuation based on today's value. A valuation of rentals in the neighborhood will also help you establish the monthly rent. Other things to consider is if a portion of the rent will go toward the purchase and the length of the lease/purchase. It is important that you use a real estate attorney to draw up the contract. The other question you want to explore is why has the home not sold? Are their factors/features that are negatives or is it priced to high or the supply/demand raito? Although you love the house now, you need to look at long-term and will you be able to resell the home when you are ready to move on? I would be happy to provide recomendations for you. Good Luck.
I know you love your sister, but unless you are financially well off enough to support her make sure you are not putting yourself in financial jeopardy.
You need to know the value of the home ( not just pick a price out of thin air), also it sounds like you are doing a lease purchase. You need to get a better idea of what rents go for in that area as well.
Lease purchases are very complex and often go sour before the purchase side is ever completed. This could cost you more money that you will never see again as well as putting your relationship with your sister at risk. The deal has to be fair for both sides.
There are many factors to take into consideration before committing to this transaction. Here is a list of questions/considerations that you need to take into factor:
1. Do you know the current worth of the home? What if the home is worth less than what you are purchasing it for? Also, what if the value of the home goes down in a year or even in the next 6 months? There might be no equity to discuss
2. Are you pre-approved for a loan? Or will you be pre-approved.
3. How much of a down payment do you plan on putting down? Lending is not like it used to be. It is not easy to obtain a mortgage loan these days.
4. How much are rentals going for in the area? If rentals are going for $1500, do you pay more because of what their mortgage is?
I can probably come up with another 5 more reasons why you really need to consult with a professional. You need to have your interests protected especially when it comes to such a large purchase. If you need any help, I would be happy to lend a hand.
It will be prudent to use an attorney or a Real Estate agent and do all the Contracts accurately.
You are buying a near $300K house, does it not make sense to do it properly and correctly?
You should consult with a Real Estate Attorney to make sure ALL contracts are legal and in the best interest of "both" parties. When all details and concerns are addressed and put in writing with an attorney, if anything comes back later, you will have a "legal and binding" contract that shows mutuality of agreement on the rent to purchase with both parties agreeing.
It's best to pay for the attorney to do it right the first time because all the money in the world can't mend a broken family situation.
Best of luck!