Randy_H's Q&A

"Most realtors agree" commission is good for their bank account.  I swear...Here's a life-key-learning:  Realtors are salesmen and women.  They are compensated on commission.  They are not financial advisers, nor are they usually even close to well educated enough to do financial analysis.  They are not economists, nor are they usually even close to well learned enough to perform econometric analysis.In fact, most don't really know how to do "analysis", per se.  When someone shows me the analytical rigor behind a CMA, for example, then I might start to listen to a realtor's "analysis".

nvchaz,I grew up the sludge on the bottom of the working-class barrel.  Cut your righteousness.  You come begging approval then bristling at criticism?  You know what a real blue collar man would do?  He'd just buy the home or STFU and go have a beer.  If you want a financial analysis, then do a financial analysis.  If you want a pity party, then go to a weight watchers meeting.

nvchazPut it into a form that's computable and I'll tell you if it's objectively a decent move.  If you don't care about all that and just want to get yourself off calling people names, then just go buy the stupid thing and get over yourself.I love it when people throw numbers around trying to prove their case, like this is some form of group therapy.  It's a blog.  If you put out numbers people will compute the results, and challenge your assumptions.By the way, it's not possible to compute your opportunity cost from what you listed above, so it's not possible to determine if you're making a good move or not.  From your diatribes against Lady C., there's at least a chance you're carrying some consumer debt.  If that's the case, then even the well-groomed numbers above won't overcome your own cost of capital.

Hate to be the bearer of bad news, but if you leave you only get to take $100K with you.  If you funnel the rest out through anonymous offshore accounts or using corporate tricks, you'll become an international tax evader.  The US makes it exceptionally hard to renounce your citizenship anyway.

The bottom line is, when you enter into lease-option "rent-to-own" deals you should be very aware that you are entering shark-infested waters.This is not a strategy for risk-averse or unsophisticated folks.The only time it works is generally in commercial real-estate, where the parties involved have real estate lawyers doing the heavy lifting.

So I agree with all that Azrob, but consider two things in your argument:1.  It depends upon the lease-option renters employing a legal-based strategy to recover their opportunity costs.2.  The types of people who generally enter into lease-option agreements are exactly as you described.  Those people also have the least amount of legal sophistication, knowledge about how to access legal representation, and/or money to pay for half-decent legal representation.That said, I have heard (2nd hand mind you) of a guy I used to work with who intentionally ganked a slimelord who was trying to pull off a lease-option deal.  But in that case the renter/owner guy was one of those obsessive engineering geniuses with lots of time on his hands and no family to worry about.  So he probably spent many dozens of hours poring over his strategy to juke the owner/landlord.

It's getting very hard to find desirable homes that aren't in MR zones.

Lease-option or rent-to-own deals are almost always a screw job for the buyer.  The premium for the optionality almost never justifies the benefit.  This is options valuation math 101.

The interest and property taxes are deductible and since home prices and interest rates are so low, it is a great time to buy if you can qualify for a loan.blah blah blah.  It's this kind of crap why I left Zillow.  I swear that realtors have no clue what the time-value-of-money is, not to mention opportunity costs.  I won't even get into how tax calculations work (hint:  it's an iterative, diminishing computation).It's simple:  if you pay too much for a house now, you are denying your family that many $$$ worth of future standard of living.  It makes no difference how long-term you stay there or what rates are, all you're doing is locking in paying too much monthly nut more for XX years than your neighbors who waited a year or two longer and bought for 2/3 of your price.Think of that when your kids are struggling to go to Acme Jr. College and theirs are going to Ivy Plus U.

My answer is that you seldom can, and even less often should buy a house you've rented first.  The reason is that the price you're willing to pay will inevitably be less than the price other buyers are willing to pay.The reason is simple:  you have information about the house which even the owner/seller may not possess.  The seller is better off selling to someone with less intimate knowledge than you, who know exactly where all the leaks and creaks are.This is also one of the reasons that lease-to-own is always a terrible deal for the buyer.