Re: Lease Option question - Posted by Tom A, of PA
Posted by Tom A, of PA on January 28, 2000 at 17:24:13:
Let’s see… Well to begin with I will be doing this from the point of protecting you.
I would do my own comps to find out the real FMV… not probably… 100-110K. You are looking at taking over a mortgage of 96K and paying them 8K… that’s 104K and if the FMV is closer to the 100K range then you may be saving them the realtor’s commision, but you are overpaying for the house. Seems one way for them.
I would not do a lease option if I could do something else. I am assuming that you have the 8K they want, if not you will have to let me know what your financial position is in this. I’m guessing that you are attracted by the “ready made” financing that is there.
I would try to do a purchase agreement with a “subject to” the existing financing. This way you could have the deed prepared and given to you or put into escrow (again assuming that recording it may trigger the due on sale clause). Give them the 8K down and take over the payment book. The loan would still have their name on it (just as it would with a lease option), but the deed would have your name. Hey, they are getting their 8K and saving the commission they wanted. You are getting the house and the financing you want.
I again assume (I know dangerous) that you want this for your own residence. If it is an investment, there is not enough equity (or any at all if the 104K is more than the FMV) to do this deal. Just because it is available does not always make it a good deal.
Hope this helps
Tom A. of PA