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What is the advice on "lease to own" or "take over payments", is this a good idea?

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December 19 2008 - Mountain View
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rjon.101

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A lot of rip offs occured in 2004 to 2007 on this idea, and law enforcment does not have the resources to help you get you money back. If you are the buyer there are 100 ways to loose all your money above what you paid for rent with not a chance of recovering any even if you have the time and resources to pursue getting your money back, you are at the mercy of the seller.
DONT DO IT !!!
you should be able to find these stories using google.
IF you do not have tonns of re experiance then any time you have anything other than a simple straight foward deal it probably is not a good idea.
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July 01
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Michael Russell, "real estate mike"

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Take over payments means, usually, they can't sell at a profit and their lender has to approve it. I see no advantage to the renter in lease to own, just lease then buy when ready. Why but a large deposit down to lease and arbitrarily if you miss rent you could lose all that deposit?
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June 30
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Roberto Ribas, "azrob"

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lease to own is almost always a terrible idea, what Rocksand doesn't understand, is ANYTHING that leads directly to a transfer of title almost certainly is in violation of the "due on sale" contract the owner currently has. In the past, when rates have gone up, banks have actively pursued these, and most owners simply cannot pay the home off with cash in a month or two.

so, recap:
1. likely violates existing lien terms.
2. If no bank will loan someone money, because the person is a high risk why would any owner in his/her right mind want to loan them money?
3. if the home value goes down, it will never be sold, as the appraisal won't work. If it goes up, the buyer will find a way to buy it, so for a seller it is 100% of the market risk, with 0% of the market reward.
4. the "new owner" will feel free to remodel/damage the home any way they want to, since they are buying it. When they don't end up  buying it, I hope you like the changes!
5. If they quit paying, they may very well have some rights due to "equitable title" Instead of a normal eviction, you may very well have a long painful expensive process on your hands.

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June 30
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Roxy Redenbaugh, "LoanLady Nationwide"

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OMG, I am surprised to see such a negative response. I've done several loans where people have completed a Lease Option contract and they are ready for regular financing. These deals are ok and is a great why for people to transition into a mortgage. YES you need to be careful and have a RE agent help you or a title company ... have a good contract and put all the terms in writing. The agent does't get paid until you actually buy, but in this market a sell is a sell. With our current lending and only to AAA borrowers...  or FHA if you qualify, full doc etc.... We will all be seeing more of these deals. We all need to be more open to them. There is no reason why a seller could not secure a buyer in this matter or a buyer have a chance at homeownship where he would not be able to otherwise. Seller financing is another options to regular financing.
Seller carry back or 2nds provided by seller is another.
If you need more information about this I can also help you.
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June 30
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workabee

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No man, stay away from these. Most of them are scams. You pay the owner takes the money and you finally leave with nothing.
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June 30
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Arpad Racz, "aracz"

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Hi,

There is some information regarding this at: http://homebuying.about.com/od/financingadvice/qt/091007_leaseopt.htm

Your local agent can also search to see if any of these are available in your area.

Best regards,

Arpad


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June 30
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Tiffany Bond, "TiffanyBond"

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Bad idea....almost 100% of the time.
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December 19 2008
 

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