I am a newbie. I want to purchase my own home. Currently I have a homeowner willing to work with me. However, I don’t want to make a mistake or buy the home on their terms. What advise does anyone have with regards to the steps I should take to control this property on my terms? If this is a go, what contract should I use? PER KEC suggestion
The seller’s motivation is: Home is empty, had his home built, will be moving soon. Will work with me if Real Estate Agent does not sell. Has been on the market for 3 months and did not sell.
Why would you purchase anything on their terms? Do you have bad credit? Little or no cash to put down? Why is the seller willing to L/O his home to you? Is the seller in Trouble or is he an investor or does he have another house he lives in? Whats his reason/motivation for selling?
You need to answer these questions first before you do anything. Why don’t ya just buy it from him and be done?
If the Seller is in trouble and you eventually want to buy the home because you can’t right now DON’T do a Lease Option.
The home is empty - and has been in the Market for 6months and has not sold. I do not have good credit (Yet) to buy or get a new loan. So I thought the best way is to control the property with a L/O. The seller had his new home built and needs to sell, I just can’t qualify. But as a newbie I am trying to understand the no money down process. What do you think?
Have you talked to him about owner financing yet? No banks and no lenders so this might be an avenue that you might want to explore as well. Plus with owner financing as the buyer you don’t pay any origination fee, junk fees, surveys, PMI, etc. Might be worth a shot.
The Seller probably has good debt since he now owns two homes. You can do a Lease Option then as long as he isn’t in trouble. Try and do a L/O that favors you i.e. lower than market rents. Todays price or less to purchase in couple years, Rental agreement will be your option consideration.
Or you could purchase it sub to with a little money down and just make his payments until your ready to finance.
I don’t quite understand seller financing. How can I explain to a person wanting to do seller financing the terms. OK with seller financing, who gets the tax benefit? I need step by step instruction on how to go ahead with a seller finance deal. Can you help
Are you saying that Ron LeGrand actually owns the home that you want to buy? Do you know who Ron LeGrand is?
If this is the case, trust me, he understands owner financing…
Just explain to him what you have said here, and he will or won’t owner finance…this just means that he actually acts like the bank and issues a mortgage and note for the property at an agreed upon price, with an agreed upon interest rate, and agreed upon length of time…you pay him monthly payments.
He sells the house, gets a better rate of return than the bank would pay, etc.
It is not a good idea to lease option a house from someone who is in financial trouble because the property will stay in the seller’s name until you the option is exercised. If they declare bankruptcy, the property will become part of the assets of the bankruptcy. Since the owner is not living in the property, it is not exempt from seizure and sale to satisfy debts. Also, if the seller is not paying his/her bills, the property can have a lien put on the title that must be paid before the title can be transferred. In general, with a lease option, you want to help the seller solve a problem (get rid of a property and its associated mortgage), not create a problem for yourself.
There are no “guarantees” but if you find a seller that has already bought their second house and trying to get rid of the first one, you have a pretty good chance that they are not in financial trouble.
If you do follow thru with the lease option, here are some steps I would take:
1 ask for a prtion for rent be applied toward deposit
2 Have option papers noterized.
3 file option papers with the county to show you have interest in property.
All of you are great. In response to the one that asked me if Ron LeGrand owned the home the answer is NO. The investor that controls the home obtained it Sub 2, as for lease w/option that is a no go. What happened the current owner is an investor and he has a mortgage broker trying to get me approved so I can get the house. I am not sure if I should buy it. I can’t qualify right now.