Sale fallen through. Should I rent with a view to purchasing in the future

MissesMoon

As the title indicates the purchase has fallen through and seller is going to rent out property for another 2 years or so. The house is in negative equity and he figures it is not worth his while selling… pity he didn’t consider that before my offer was accepted. Aw well!
Anyways, should I rent off him for 2 years and ask for first refusal on purchasing then or cut and run? Although the house is perfect for me I’m a bit concerned that he will change his mind then again. There is nothing similar in the area and my budget is restricted. (single first time buyer)
What do you think?

johny33

maybe a rent-to-buy would work? check it if it suits you and if yes, offer it to the owner.

Balmed Out

Run. He may well just continue to string you along indefinitely, it would make sense to do so from his point of view. I would also be hesitant to buy when single as your circumstances may change dramatically. Im sure you have considered that all ready but just in case.

Michael D Not Higgins

There's a few things that would prevent me from doing what you suggest.

Firstly, his finances might not be great and he could then be remiss in his obligations as a landlord to maintain the property. Knowing that you're in the house waiting to buy it, he might default to you for the upkeep.

Secondly, if he's waiting to come out of negative equity, it'll happen one of two ways (or a combination), paying down the principal or prices rising. If the price rises, you've been paying him rent and then paying him more money later to buy the property. If you're waiting for him to pay down the principal, it could be a long time depending on the amount due and his personal finances.

Michael D Not Higgins

johny33 wrote: »

maybe a rent-to-buy would work? check it if it suits you and if yes, offer it to the owner.

Rent to buy will pretty much be unworkable if there's a mortgage involved.

Humour Me

Presumably he will be putting a higher price on the house in the future. Would you be able to pay more in 2 years time?

I would be hesitant to use a rent to buy scheme without without a detailed contract between you. What protection would you have if he got a higher offer and decided to take it.

Ask about the possibility of renting the property as it suits you now, just be aware he is under no obligation to offer you first refusal when he goes to sell.

SarahMollie

This sounds like a really bad deal OP. Sure theres nothing else on the market right now that you like but that could change.

Right now your seller knows you could walk away. If you're 2 years living in the property and therefore likely (even more) emotionally invested, your bargaining power is diminished.

Also, there is nothing to stop the seller putting the house on the open market, and you could easily be outbid.

Graham

Rent to buy is a non-runner, banks no longer (if ever) consider them and why would the current owner offer to deduct 2 years rent from the full market value in 2 years time when he could get 2 years rent AND the full market value.

Forget it and move on.

MissesMoon

Many thanks for all the great replies. I'm going to walk away and keep looking.

MarkAnthony

I see you're walking - wise move IMHO. If you were willing to do that why not just offer a higher amount to get it out of neg equity?