Lease to Buy Option? Need Advice?

Question

I need some general Do's and Don't for this option. And I want to make sure if this IS the option we go with, I want to do everything by the book and correct so we don't get screwed in the end.

~Should we consider employing a real estate agent to help with the negotiating process? (we have some family friends that are RE Agents)

~Is an attorney necessary or just recommended?

~ETC. Any other information or rescources you can provide would be greatly appreciated.

Answer 1

With any lease/option/purchase agreement, it is advisable to have legal representation for the actual contract, to insure that your interests are properly covered contractually. Whether or not you retain a real estate agent is your choice. If you are a skilled negotiator, you may not need an agent. However, if the property involved is listed by a real estate agent, it won't cost you anything to engage your own agent, since the sellers are paying the brokerage fees.

The key issues with which to be concerned are 1)What happens to your excess payments (over the value of the actual rents) if you elect to not purchase at the end of the agreement, and 2)certification and documentation that part of the payments you are making are being send to any mortgage holder during the renting period.

I've seen more than one sorry case where a person entered into a rent/lease agreement, and the sellers took the cash and allowed the house to go to foreclosure.

Answer 2

Be very careful in this type of deal. Most rent to own situations are not always the most honest groups of people. You will find stipulations in your contract and even if one day late on some payment, it could be voided out and your money would be gone. Get a lawyer and do a background check and research on the other people invovled..esp court info.

Answer 3

Paige, these deals very rarely work out. You would be wise to have your agent friends help you. Even if they can not help you negotiate have them look over your paper before you sign ANYTHING.