HELP!!! Anyone bought a house from owner using lease to own?

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J-MacsMopars

J-MacsMopars

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Hey all. I am looking at buying a house and have been working with the owner to do a lease to own. Does anyone have any experience doing this? What kind of things do I need to make sure we cover in the paperwork. Any help would be great. Thanks, jeremy
 
Things to be sure are in contract by lawyer - interest rate even if it is 0%, what penalties you owe the seller if you are late on any payments or interest on late payments. The type of interest - ie compound (and how often - quarterly, semi-annual or annual) or simple interest. WHo pays what transfer costs - there may be municipal transfer fees, title searches (a must to make sure there are no leans on the property for debts the seller has against the property ...... Talk to at least 3 lawyers to find out their experience. Just cause they have done it before doesn't mean they are aware of everything.
 
Be careful, I got screwed on one of these from a friend, hate to see what would happen from a stranger. Also make sure you know who pays the taxes.
 
Beware of a Balloon payment in x years unless you are going to mortgage it before that.
Some real estate courses I have taken in the past,tell owners that a lease/purchase is a good way to collect more than rent and the tenants take care of the property like it is theirs and very few actually purchase the property.
Lawyer is highly recommended.
A mortgage would be a better choice,if it is doable.
Good luck,
TXDart
 
If you are in a escrow state, escrow can prepare escrow instructions between buyer and seller and hold funds paid over and above rents. If you are in a state that use attorneys, it is a lot more expensive to have an attorney prepare contract. You will still have to qualify for a mortgage at end of term, but you will have saved a down payment. Seller responsible for existing mortgage, taxes and insurance payments. Only advantage to a lease option is you settle on a price and you save up for the down payment with your rent payments. If your disciplined, you can do that on your own.
 
Be very careful and have everything put in writing. Make sure there aren't any clauses that limit you from refinancing with a conventional lender down the road......Good Luck
 
Yea what they said, also some banks DO NOT allow people to do this if the house is mortgaged, if they find out they will call the loan in on the owner.
 
Have a local property owner that does lease to own stuff. Make sure you cover missed/late payments. I spoke to one of the peolple that are now just renting from him. One of there payments was late thanks to the USPS trashing there payment and that voided there contract to purchase.....the owner of the property is a real *** clown.....but to be safe GET A LAWYER.....
 
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