Please let me premise my answer by saying that I began Real Estate in 2006, right as the market crashed (great timing, ehh?). I've been fighting for my clients - Buyers & Sellers alike - this whole time. I'm closing deals; fighting for Short Sale Approvals; and getting offers accepted (with a pretty good degree of success, I might add). The 30+ years (experienced) Realtors in this business, say that this is the 3rd Real Estate "bubble" that's burst in their careers, and most feel that this is by far the worst of the three. The agents that have stayed in the business *during these years* are often TOUGH, determined, dedicated professionals who normally know more about today's market than those who took the last 6 years off (waiting for the business to get easier). Choose a Realtor whose been in the business DURING these years, and you'll often be at an advantage. You can verify that "6 years" thing with the DRE (California DRE.gov - I think). Also INTERVIEW agents - either on the phone or in person. Make sure they have *your* interests at heart & that communication between the two of you is CLEAR. The two of you need to work as a TEAM.
Honestly, here's the problem that you're facing: It's a Seller's Market out there. What that means is there's an excess of Buyers, and very little inventory (homes for sale). Many loan-based Buyers are losing out on their offers because all cash offers (which are more sure & close escrow much quicker) are more attractive to Sellers. From what I've seen lately, your odds of finding a Seller that's willing to take a Lease Option are less than 3% (and that's on a *really good day*). Most Sellers have multiple offers to purchase right now, so why would they want to wait to get paid? This is, of course, my opinion & based on only *my* experience. My honesty can be irritating, but it's for your own good!
The 2nd problem that you may not realize is that Lease Options, in general, require a substantial down payment, and higher monthly payments. Are you prepared to handle both of those things? Remember too that usually only a portion of your monthly payment is applied to the purchase of the house. That way, the Seller doesn't lose out if you decide not to buy the house.
I know you want to get into the market NOW, no doubt due to the low prices, and the increase in the interest rates that we're facing. If I was in your situation, I'd work hard to improve my credit score. It normally increases pretty quickly unless you have any major 'glitches' on your record. Go to http://www.freeannualcreditreport.com
to get a current copy of your credit score (which is FREE once a year, by law in California) - BUT - do *NOT* do this if your credit has been checked recently because it'll lower your score a bit! Whoever ran your credit should give you a copy. Then go to the websites of the 3 biggies in credit: Equifax, Experian & TransUnion for instructions on how to read your report; how to file disputes if there are errors; and how to improve your credit score. Also try http://www.creditkarma.com
for some great tips on this. Raising your credit score will often get you better loan rates, which'll make your monthly payments lower. It's truly worth the work!
When you *do* buy, don't forget: NO MAJOR SPENDING while you're in escrow on a house! Lenders run your credit AGAIN just before the deal closes, and if you've been out spending like crazy (new furniture, a new car, etc.) they can CANCEL YOUR LOAN!!
I have lenders that I would recommend to help you work your way through all of this. Please feel free to contact me should you need those names.
I wish you the best of luck, no matter which path you choose!
Sue Goodrich, Realtor
CENTURY 21 Select