Profile picture for ShyritaFrazier

To Buy or not to Buy

I am currently renting a townhome through a property manager who is also a realtor.  The owner of the home would like to sell it to me, but I currently do not qualify for a mortgage due to some credit issues (my score is 605).  She is offering a two year lease where I pay $150 extra a month to her for "contribution to a down payment to buy the property" at the end of the two years.  I am at a loss for two reasons, I don't like the house because of the current condition (not to buy, anyway). AND there's no guarantee that I will qualify in two years (if I don't, I lose the additional $3600 I paid).   Should I cut my losses and move out now, or take the deal?  S/N...I'd be more apt to take the deal if she did renovations...but I don't know if she would agree to that.

Please help!


  • November 27 2013 - US
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (6)


Hi Shyrita,

When you said "I don't like the house", that pretty much made it clear for me, but I'm going to agree with all the other real estate professionals here about the rent to own arrangement...

Rent to own usually favors the owner. First of all, there are few homes even listed as rent to owns, so your selection is limited. How do you feel about being expected to pay $150 rent over and above the usual rent? Remember all that money will be forfeited if you do not buy the home for any reason (if you can't buy at the end of the lease term because let's say you can't qualify for a mortgage, etc. you lose all of that money!)  The risks go on and on... I would say you should rent while you're working on raising your credit score and then buy when you find a home you love...

Either way good luck and Happy Thanksgiving!
  • November 27 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

The proposal for the rent-to-own with the additional $150 towards a down payment is not unusual.  However, those are very tricky deals to get in to.  What stood out to me is that you don't like the townhouse to begin with.  Save your money, spend a few years building your credit, and then buy a home that you like much better!
  • November 27 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You are correct, Shyrita. You should not buy this house, and you gave everybody a textbook illustration of why rent-to-own is a bad deal. Absolutely, when your credit is back up in the high 6s or 7s, you will want to be able to buy a home of YOUR choosing!

All the best,
  • November 27 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

My advise is pretty much the same as sunny, save your money, in the meanwhile work on your credit score, in 2 years you will have a great credit score. By then you will buy the house of your dreams and not something that you really don't like.
Happy Thanksgiving!
  • November 27 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Outer Banks N C
There are more things that you will need to agree on now, such as how much to pay in 2 years for the property. If you guess wrong the lender might not allow the sale at that amount and you could default that way as well as not getting a loan because of credit issues. I am not a fan of rent to own since it favors the owner more than a renter and so few ever go through and work. Just rent until you can really buy and then buy.
  • November 27 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
I would not buy or enter a contract if you are not sure you will be able to qualify down the line. This owner would not be offering this deal to you if they could sell this townhouse for the same price to another buyer who could qualify now without a lease to own.

My advice is to address your credit first and save your own $150 a month in your own bank account for your down payment instead of risk losing it to this owner. Talk to a lender now. Many have experience in helping buyers like you address credit issues, get a plan for a down payment and get qualified. Start working on that now, so you can buy later.
  • November 27 2013
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.