Rent to buy offer

Thespoofer

I have come across a property that I would glady never move from again and would be very happy to rare my kids there.

I think the owner is looking for a quick sale and has also offered a rent to buy solution on the property.
Basically the property is an old cottage, asking 200k ( not too far above what I believe to be a fair price ) and if a deposit of say 20k is put down the rest can be paid over 10 years +/-.
After an initial conversation with the estate agent they reckon the property cannot be modified in any way until fully paid for and if we miss a payment we can loose all our deposit and rental/payments made.
Now I do understand from the owners point of view they don't want someone moving in and after a year or so not paying anything and this of course opens up a whole can of worms.

Heres where we are, we could put down 50 k as a deposit and the rest over 10 years but is there a contract that can be drawn up to satisfy both parties where buyer wouldn't loose deposit and owner is guaranteed security ? is it possible that these rent to buy options can work ?

I forgot to mention the payments would be interest free.

Thanks.

killers1

Thespoofer wrote: »

I have come across a property that I would glady never move from again and would be very happy to rare my kids there.

I think the owner is looking for a quick sale and has also offered a rent to buy solution on the property.
Basically the property is an old cottage, asking 200k ( not too far above what I believe to be a fair price ) and if a deposit of say 20k is put down the rest can be paid over 10 years +/-.
After an initial conversation with the estate agent they reckon the property cannot be modified in any way until fully paid for and if we miss a payment we can loose all our deposit and rental/payments made.
Now I do understand from the owners point of view they don't want someone moving in and after a year or so not paying anything and this of course opens up a whole can of worms.

Heres where we are, we could put down 50 k as a deposit and the rest over 10 years but is there a contract that can be drawn up to satisfy both parties where buyer wouldn't loose deposit and owner is guaranteed security ? is it possible that these rent to buy options can work ?

I forgot to mention the payments would be interest free.

Thanks.

A couple of things struck me about this....

A rent to buy scheme is generally taken up by people who don't have a deposit saved. The rent they pay goes against the asking price and once they have paid over 10% of the price they should be in a position to apply for a mortgage to purchase the property. If you have €50k deposit why have you not thought of buying the property outright now? If it's a case that you can't get mortgage approval at this stage do you think you will be in a position to buy further down the road? If the owner is willing to allow you to continue on a rent to buy basis (for 10 years!) you'd be mad to borrow money from a bank when you in effect will be getting the property on an interest free basis. If the owner has a mortgage on the property sooner or later he'll realise he made a mistake as he is covering the interest through his repayments and you are getting an interest free offer. There's a big difference between 'a quick sale' & a 10 Year rent to buy option!

The rent to buy option does work and is quite common. You would need to have a solicitor draw up a watertight contract protecting both your interests as you mentioned above.

Thespoofer

I rang the estate agent the other day about viewing the property with a view to purchasing under the rent to buy option and he really tried to convince me it wouldn't work so far as to say there wasn't any point in viewing as it wouldn't work.
I told him even though the seller suggested a rent to buy option he went on saying it wouldn't work, too complicated, she's foreign ( seller ) and that was her idea, our own solicitor even said it could get too messy, I'm going to take down that option from the ad ( still there ) blah blah..

I've a good mind to contact the seller directly but would this be an underhand thing to do ? I'm very annoyed at this guy , he seems to have a very negative view on this, unless he's got a hidden agenda and I wouldn't be surprised if he didn't inform the seller about my contact.

killers1

Thespoofer wrote: »

I rang the estate agent the other day about viewing the property with a view to purchasing under the rent to buy option and he really tried to convince me it wouldn't work so far as to say there wasn't any point in viewing as it wouldn't work.
I told him even though the seller suggested a rent to buy option he went on saying it wouldn't work, too complicated, she's foreign ( seller ) and that was her idea, our own solicitor even said it could get too messy, I'm going to take down that option from the ad ( still there ) blah blah..

I've a good mind to contact the seller directly but would this be an underhand thing to do ? I'm very annoyed at this guy , he seems to have a very negative view on this, unless he's got a hidden agenda and I wouldn't be surprised if he didn't inform the seller about my contact.

This is really quite plain and simple! Under a rent to buy scheme the estate agent doesn't get paid a commission! Bypass the estate agent, go straight to the owner, get a 10 year interest free loan effectively and you are laughing all the way to the bank! Is it any wonder the estate agent isn't interested in a rent to buy scheme??

not even wrong

killers1 wrote: »

get a 10 year interest free loan effectively

There are two possibilities here:

• The seller is stupid and is giving away a five figure sum of free money
• The "interest free" portion is already priced into the asking

I reckon it's the second one that's more likely here...

killers1

not even wrong wrote: »

killers1 wrote: »

get a 10 year interest free loan effectively

There are two possibilities here:

• The seller is stupid and is giving away a five figure sum of free money
• The "interest free" portion is already priced into the asking

I reckon it's the second one that's more likely here...

If any comparable properties have sold recently in the area you'll be able to determine whether the 'interest free' portion has been added on. Even on a Rent to Buy property you can negotiate the purchase price downwards to what you perceive the Market value to be...(without paying a 'premium' for the int free portion)

Slydice

Thespoofer wrote: »

we could put down 50 k as a deposit and the rest over 10 years but is there a contract that can be drawn up to satisfy both parties where buyer wouldn't loose deposit and owner is guaranteed security ?

Really, it's a mortgage that you are talking about there except that it'd be the current owners who give you the mortgage.

Unfortunately for them, it'd mean their money is tied up in you and they might not be earning the interest they could if they ended up in that situation.

If you went with a bank mortgage though (the middle man), you'd end up paying a bunch extra cash to the bank.

Really, it sounds like you're looking for a source of interest free money to borrow from. Have you tried your parents?