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lease to own is just a rental agreement, they can find a way to keep all your money and the house one day from final payment. lease to own is a joke to scam the renter
Are you sure the house is clear to be purchased? They weren't running out on a foreclosure?
Do your own due diligence. Go to town hall. Or the county clerk. Check records for leans and encumbrances. Be certain that the house is not in foreclosure.
As of 2 1/2 weeks ago, my wife and I now live in the south Kansas City, MO area, prior to which we lived in Chicago. Before moving, we found a small ranch home listed for $64,900. It was put on the market back in January starting at $89,000, with only one offer that fell thru in April.
Due to my wife and I changing jobs between KC and Chicago, we confirmed with a lender that we would not be able to get a mortgage until after at-least 90-days on the job. Ultimately we needed a place to live, so we we made the decision to make a lease-to-own offer on the home, something a few people told us was unusual for a conventional listing. It took almost a month but after going back and forth with the sellers, I wrote up a 7 page 6-month lease with the exclusive option to purchase. My wife and I were very excited when the sellers accepted our offer, only requesting a slight change to three of the provisions. We took possession a few days before October 1st.
Anyways, my question involves the appraisal that the leaner will perform once we exercise our option to purchase. We agreed that we had the full right to make changes or improvements to the home during our lease term. In lieu of this we also locked the selling price in at a maximum of $64,900, we did put in provisions that we could negotiate a lower price if the home appraised for less than the selling price, something we felt was important as we would likely not get the mortgage in this event and it would not be right if we lost our earnest money at fault of the sellers.
So point being, we wife has a shopping list of things we need to fix/repair/replace but I'm afraid that if I make too many changes I'll hurt our chances of negotiating a lower price, even if that be only $3,000. I would say the chances of the home valuing for less are high, as the home appeased in 2010 for somewhere around $70,000 and it is obvious the sellers have neglected a few major things here and there. Even the county shows the home devaluing from $73,000 in 2011 to $66,000 last year. I would also like to prevent the home from appraising for more as we have other provisions or issues that may bring the selling price down, such as the Washer and Dryer being DOA and I would hate for a $70,000+ home value preventing the sellers from being willing to go lower.
Thanks everyone who reads this, I hope someone will have some advice to give.
Did you put up a sum of money to be held in escrow in addition to the rent and security deposit? If you didn't do that, it is not really a lease to own. Why did you write the contract for only six months? What happens if you can't get a mortgage in six months? Is there a provision to extend the contract if you can't get a mortgage?
You got some very good advice from the posters here who told you not to put a single cent into the house until you close on the deal. If you do put any money into it, it should only be for necessities such as leaky roof or a broken window. The wiring should have been checked out before you made the offer as that is a safety issue. If it looks like you will be purchasing, I would have the wiring done as it is very important.
The major problems associated with Seller-financed deals or rent-to-own contracts are due to the fact that many Buyers under those circumstances fail to do their full due diligence at the time of entering the contract. If there are problems with the title--and that can involve much more than looming foreclosures--it is better to find out about them sooner rather than later. I'm not sure what is written in your contract, but you would be well advised to have a title company check the title and issue you a commitment for title insurance.
What advice has your agent been giving you? Do you have an attorney?
I know there are some concerns with the existing owner and we will be sure to be ultra cautious as we get closer to finalizing the purchase but if anything like what you brought up happens, we do at least have the legal right to get all our money back as that's a breach of contract and I'm not super concerned as the chances of this happening should be on the rarer side of things considering our circumstances. Also keep in mind that I summarized the entire situation to spare anyone on the forum all the unneeded details. I would without a doubt be more concerned about our arrangement if we found this house on Craigslist and etc. etc. But we didn't, it's so far been thru legitimate and credible channels. We have no reasons to go into this purchase with fear of the unknown. We have faith that it will work out in the end.
On a side note, I know this might not mean a thing but the county website does list the current owners as the only owners of this property with no over due taxes. Again does not prove anything but is worth mentioning.
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