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Is this really a bad idea? ETA

Posted by Anonymous   + Show Post

we are moving, our credit isnt good enough to get a mortgage, but we found a house on a lease to own deal. Basically we will pay $650 a month for 50 months and then we will own it. We have a legit contract, notarized, etc. The house is not in great condition, but the owner is paying for some of the supplies. He bought the paint and the hardwood floors for downstairs, we are paying for the carpet in the master bedroom and the tile in the kitchen, that was the deal. We are also paying a couple friends to help with the work, and the owner of the house is giving us one month free in exchange for our labor. My SIL thinks this is a bad idea to spend our own money on a house we dont own  yet. I dont see a problem with it since we are going to own it in 4 years. Its a really good deal in my opinion. What do you think about it? 

yes, the house is actually that cheap, it was assessed at $28,000 so I'm actually paying a bit more than it's worth. I live in a small town, homes are cheap here.

Posted by Anonymous on Jan. 31, 2013 at 9:21 AM
Replies (11-16):
AllieReed
by Gold Member on Jan. 31, 2013 at 9:31 AM

Bump

Anonymous
by Anonymous 1 - Original Poster on Jan. 31, 2013 at 9:31 AM

I can look up the property taxes and the appraisal for any home in my county, $32,000 is actually a bit more than its worth. Homes are cheap in my town. last year the house was assessed at $28,000

Quoting Anonymous:

It's a $30k house?? Um yeah something's not right there.


Anonymous
by Anonymous 1 - Original Poster on Jan. 31, 2013 at 9:34 AM

bump

Anonymous
by Anonymous 1 - Original Poster on Jan. 31, 2013 at 9:53 AM

It's owner financing, there are different ways to do a rent to own, you can do it the way you described or you can do it the way we are doing it. it is perfectly legal, my brother bought his home the same way we are doing it. he has it paid off. the owner has to go to the register of deeds and document the contract, so my name will show up on the deed as well as his, only it will say land contract next to my name. Once the 50 months are up, the deed transfers over to us and we own it. If say a year from now, we change our mind, we arent stuck in this agreement, we can still move. The first year is a 12 month lease and after that it is month to month. 

Quoting Anonymous:

That is not the standard "rent to own" deal.  Typically you pay a monthly rent that is higher than normal and a portion goes toward a down payment.  At the end of the time period the tenants get a mortgage and the landlord provides the down payment.


Did you have this contract checked out by a good real estate attorney?  I would not sign until someone with legal knowledge has explained any pitfalls to you.  


Anonymous
by Anonymous 3 on Jan. 31, 2013 at 9:55 AM
1 mom liked this


Go to a real lawyer who has expertise.  They will determine if there are holes in the contract that would allow the landlord to wiggle out before the 50 months are up - with your money.  Do not be foolish and have a lay person OK a contract.

Quoting Anonymous:

It's owner financing, there are different ways to do a rent to own, you can do it the way you described or you can do it the way we are doing it. it is perfectly legal, my brother bought his home the same way we are doing it. he has it paid off. the owner has to go to the register of deeds and document the contract, so my name will show up on the deed as well as his, only it will say land contract next to my name. Once the 50 months are up, the deed transfers over to us and we own it. 

Quoting Anonymous:

That is not the standard "rent to own" deal.  Typically you pay a monthly rent that is higher than normal and a portion goes toward a down payment.  At the end of the time period the tenants get a mortgage and the landlord provides the down payment.


Did you have this contract checked out by a good real estate attorney?  I would not sign until someone with legal knowledge has explained any pitfalls to you.  




Trisha234
by on Jan. 31, 2013 at 10:33 AM
Instead of a rent-to-own agreement, why don't you have the current owner deed it over now and hold the mortgage? He would be the lender - not a bank. Much less risk that way.
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