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Law Pro
Law Pro, Attorney
Category: Legal
Satisfied Customers: 24870
Experience:  20 years legal practitioner: real estate, collections, estate, civil, business, and criminal law
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I am a first time home buyer who has been offered a rent-to-own

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I am a first time home buyer who has been offered a rent-to-own option. The purchase price is $78,000 and the owner is askingfor $1400 down and $950 a month ($200 of it will be put into an escrow acct)Initially the owner was going to charge me $750. The contract will end in 3yrs, by which time I would pay off the remainder. What advice can you offer? I would appreciate any information you can give to help. Thanks. Val
Submitted: 7 years ago.
Category: Legal
Expert:  Law Pro replied 7 years ago.
What is the fair market value of the property? Are you going to get an inspection?
Customer: replied 7 years ago.

I'm not sure. She owes $58,000 and said it was appraised for the asking price, if that helps. I do plan to get an inspector. I guess I would have to pay for that right?

Expert:  Law Pro replied 7 years ago.

Have you seen the appraisal? If not, ask for a copy.

 

What county are you in?

 

 

Customer: replied 7 years ago.

Okay I will. Once it's confirmed then what?

Expert:  Law Pro replied 7 years ago.

Then get an appraisal - to make sure of what your getting. I would get the appraisal before I signed the lease option.

 

This property and the owner are probably on the up and up. However, I have seen to many of these that the owner gives a "deal" to the tenant/buyer knowing that they not inspect the property - selling them real problems - that they can't possibly afford to correct.

 

After the inspection comes in and you get a copy of the appraisal - that everything looks good.

 

Are you sure that you can qualify for a loan to pay the balance in 3 years?

Customer: replied 7 years ago.
I did ask her about the conditions of the home, just to see her reaction and she said there are no major problems and whatever is there, she'll be willing to fix. However, she is selling it "as is"...which I just remembered to mention. I'm not sure I will qualify, for any unforseen issues can arise, but I will be working dilegently to repair any negative info on my credit.
Expert:  Law Pro replied 7 years ago.

You need to know then what potentially is wrong with the place - that's usual "as is" which makes me pause.

 

You also need to be able to get an extension of time in case you don't qualify in 3 years - like another 3 years. After 6 years - you should be able to qualify and have enough equity.

 

After those couple of things - I think you'll be alright. But you need to know and have the property inspected.

 

I would also ask that she sign a disclosure statement - that's just in case there's something that she knows and isn't informing you of. You can pick up a disclosure statement at a real estate office.

 

 

Customer: replied 7 years ago.

One more question. Hypothetically speaking, if all clears in my favor, should I still consider negotiating a lower price on the house and if so, is taking $10,000 off pushing it?

Expert:  Law Pro replied 7 years ago.

What county is this in? Do you know if your county has a property tax assessment website?

Customer: replied 7 years ago.
It's in Philadelphia, PA and no I'm not sure but can find out tomorrow
Expert:  Law Pro replied 7 years ago.

Yes, Philadelphia has a property tax assessment website that you can review. You can review what comparables they used, the assessed value of the property, and their owner's tax payment history.

 

That's one more thing - you should get a title search performed to make sure there are no surprises.

Customer: replied 7 years ago.
Okay, thank you sooo much for all your advice!! It helped me out so much!!!
Expert:  Law Pro replied 7 years ago.
You're welcome. Good luck!! Ask for Law Pro if you have another issue with this. I'm a Pittsburgh attorney.
Customer: replied 7 years ago.

Okay, I most certainly will!!!

 

Expert:  Law Pro replied 7 years ago.
Thanks!!
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