Lease to own - unsure (recommendation, appraisal, negotiations, agent)

[breaddrink]

A little unsure if this is the right forum or if renting is more correct as this falls a little between the two

I'm a rather inexperienced divorcee, doing this for the first time alone.
I find myself in a situation where I agreed to and signed up on a lease to own house, set at a price.

This was right smack in the middle of the housing slump and, around here at least, there were a lot of houses unable to sell and suddenly going up for rent or lease to own.

We love the house, and though it's a lease to own situation, rent is fair and not higher than it should be for this area. Our Landlord/seller is excellent and seems to be a truly nice person. It seems likely to presume he was having problems selling, and took this path because of that.

The problem is that the house is no longer worth the asking price.
According to zillow it's worth roughly 35k less than the price we locked in on, and so my question is one of advice and opinion.

I don't want to purchase a house that is already enormously underwater before the fact, and I'm not entirely sure I could even obtain the mortgage with this in mind.
With this in mind, I'd imagine that the seller wouldn't be too hasty to have us back out as he will not be able to obtain the original asking price anyway should he just try to sell it (even after keeping our float of money should the lease to own fall through and we do not accept it and buy the house after our lease time is up.)

What is the best way I have to go ahead here? Should I get the house revalued? Should I approach the seller (our lease still has roughly 6 months left on the 2 year lease).

As I say we love the house, but it's not worth the original asking price any more and I find myself a little in the dark as to what to do next. Even a continuation of the renting situation is an option for us...We just don't want to, and I'd imagine from a banks perspective? not be able to purchase a house now priced so far out of it's bracket.

Many thanks in advance.

[2bindenver]

I'd say wait 4 more months. You have no idea if you want to buy right now. Zillow is wrong.

[nikitakolata]

If you are concerned about the home's value, you need to get an actual appraisal done. Zillow's data is NOT accurate and cannot be relied on.

[hueyeats]

Actual appraisal is always highly recommended.
And you should wait till your lease term is up before "reupping" the lease or buying... so the LL do not take your down payment.
It is a good time to review your old contract... consult a lawyer for a better opinion on what to do next.

[breaddrink]

The contract states that we would lose down payments and also the amount set aside each month. It would roughly be 7 thousand dollars lost, plus 1200 back for us (we had this written in should it be impossible for us to buy to ease transition to a new rental house).

The reason I ended up staring at zillow in the first place is due to the interest I keep on local houses up for sale in our neighborhood and how astonishingly long they've been taking to sell.
Due to the length of time it's been taking them, and the amounts being asked it seemed that Zillow may be in the right ball park at least.
A house we saw built up again from the inside out and nearly twice the size of this house on a similar lot size just sold for only twenty thousand more than the asking price for ours.

Any recommendations as to who to use for an appraisal and the amount this usually costs?

[Rakin]

TX has almost made Rent to own impossible to do, most attorneys won't touch them due to the risks.

The reason is there are so many pitfalls and potential problems to work around. You may need an attorney but I'd go find a home I could buy the old fashioned way if possible.

[breaddrink]

The way I saw it at the time was, even if it all fell through it was a fair renting price.
The deposits were the going rate (first - last and a damage deposit), and considering the other houses we saw, it was by far the nicest (though a little small).

We felt we had nothing to lose. Just find ourselves coming to the end of the leasing period, not wanting to move but feeling the price may be high enough to make it an underwater purchase straight off the bat, and so possibly not worth it, even after the losses.

Any advice on appraisers would be fantastic. I have no idea where to look for them. Is it a real estate agent service?

[Rakin]

I have a renter client buying the home he's living in which I had on the market last year. He's at somewhat of a disadvantage in negotiations because the house never went back on the market for the homeowner to feel the "Pains" of selling.

We've got it all worked out but he's buying using a standard purchase contract not a Rent to Own type purchase.

Get a buyers agent you trust, you and him evaluate "True Comps" and put together a realistic offer to the owner. The agent needs to get paid so you'll need to discuss and work out who's doing that.

[DMenscha]

Zillow is "in the ballpark" unfortunately, they aren't playing in the same ballpark as the rest of the world.

I'm still waiting for the first "rent to own" deal to actually close.

[breaddrink]

One last question. Is an appraisal the same as a property inspection?

I've heard tales of property inspections costing thousands.

Interesting to hear peoples low opinions on Zillow. Are they just notoriously low in their numbers or utterly random? I'm looking at their figures on prices houses have sold for and they seem to follow a logical path in their assumption of the property value to present day.

Looking at those houses that took forever to sell, it's lowered the price on ours again. There's now a 93 thousand dollar difference in zillows guesstimate and the locked in price on the lease to own. :/