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June 2, 2008
Renting with Option to Buy
We are in contract on our Brooklyn condo, and are about to make an offer on a house in the "burbs".
We've been city people all our lives, and we're 95% sure this is the right thing to do for our family, however there is still that slight hesitation. So rather than buying the house, we would like to rent it with option to buy in one year.
Do you set the price now, does part of rent go toward the down payment? How does the process work overall?
Thank you.
Comments
Will the owners go for this? You would have to make a much better offer than anyone else as most owners wouldn't want to take the risk that the house goes back on the market the next year.
I do think that generally a rent with option to buy means that some portion of your rent goes against the purchase price of the house. Your other option is to simply rent in that suburb to see if you like it, then buy something. It definitely sounds like a great deal for you if you can negotiate some kind of rent with option to buy on a house currently on the market -- after all, if the market suddenly tanks, you can walk away from the house in a year.
Posted by: guest at June 2, 2008 11:22 AM
In this market, wouldn't renting just make sense anyway?
Posted by: Putnamdenizen at June 2, 2008 11:57 AM
I can't see anyone but the most desperate homeseller going for a "rent with option." However, if you manage to line up this option, I don't think there is any set process. Its all in what you negotiate.
Posted by: guest at June 2, 2008 12:23 PM
Just rent if you can. . it's a no brainer, even if you are 100% sure.
It's a super no-brainer if you are only "95%" sure
That being said, I bet the sellers will tell you to take a hike
Posted by: guest at June 2, 2008 1:19 PM
It's not crazy to rent for a year to make sure you can make the suburban living and commuting work for you, before you buy. But I agree with the others. Rent a proper rental apartment for a year then if you love the suburbs find a different place to buy. Prices won't be going up over the next year in the suburbs.
What I really noticed is you didn't say a word about the house, if you like it or what. So I assume you are ambivalent about it. Which is not good. If you don't love this house so much you're willing to take the plunge and buy it outright, then don't rent to buy it, and don't buy it. I'm such a believer in needing to be in love with a place. I have always figured if I fall in love when I walk in then I will always enjoy the house all the years I have it and eventually when I sell it makes it all the easier to sell it if it has that kind of appeal. And it turned out I was right about that, with my former house. It sold in less than a week.
Posted by: guest at June 2, 2008 1:43 PM
I think it's a great idea. Some owners would be happy to have the rent and the possibility of a future sale. We were once in that boat--couldn't sell our house but needed to move because of a job transfer and we ended up renting the house out for three years while we rented elsewhere. When the renters left, we put the house on the market (a better market this time) and sold it immediately.
Posted by: guest at June 2, 2008 1:55 PM
OP here. No, we love the house, and its actually being offered as a rent to buy option, as are many of the houses we've looked at.
We're just clueless about the process. Again, when is the price set, can the rent be applied towards the downpayment. However from the responses, it sounds like anything can be nagotiated.
Posted by: kdabrowski at June 2, 2008 2:15 PM
If it's being offered as "rent to buy" then yes some of what you paid already can be applied towards purchase. You need to involve an attorney to answer your questions and negotiate the rest for you and do your contracts. I would not enter into this kind of contract without an attorney.
Posted by: guest at June 2, 2008 2:31 PM
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