Advice on Lease purchase plan for a home..

[brownee]

Hi! Well, our initial plan was to get everything together and buy a home this year..in April or May. Now, it looks like we may not be quite ready in April or May, so we thought about doing a lease purchase for a home. Does anyone have any advice for us? Is it a good idea? Pros? Cons? Things like that.We have found the house we love and they are willing to do a lease purchase as the house has been on the market over 500 days. I think that we should be able to purchase before the end of the year, but we don't want to lose this house and want our daughter in the school district this house is in...thoughts?

[ShanetheMortgageMan]

Several pieces I've written about it.

http://ficoforums.myfico.com/fico/board/message?board.id=loans&message.id=11419&query.id=98780#M1141...

http://ficoforums.myfico.com/fico/board/message?board.id=loans&message.id=26036&query.id=98780#M2603...

http://ficoforums.myfico.com/fico/board/message?board.id=loans&message.id=28427&query.id=98780#M2842...

[brownee]

Thanks, Shane. I guess it isn't as cut and dry as we thought. We'll be sure-if we even have to go that route- to get an attorney involved to look over what we're signing and make sure we don't come up short at the end of the day.

Anyone else with experience or thoughts?

[gabbygirl99]

My husband and I did a lease purchase on a home Sept 1, 2008. The lease agreement was for a year. We recieved a letter in the mail last week from the bank that the builder whom we have the lease purchase agreement with is going into foreclosure and the home will go to auction. We put $5000 down with the intention of that going toward the down payment that we will not get back unless we go thorugh with buying the home. However the problem with buying from the bank now is we don't get any warranties that we would have originally gotten from the builder. I say wait until everything is in order...there are plenty of houses out there and they aren't going anywhere too soon. I'm not saying that if you go with it that it wouldn't work out b/c every situation is different but I wish someone would have given us this advice before we signed on the dotted line.

[brownee]

Wow..ok, thanks gabbygirl. I hope your situation works out for you. That's something i'll have to keep in mind. So many cons to things like this. Perhaps things will work out where we don't *have* to do this. I suppose we really don't HAVE to, since-as you said- there ARE many houses out there. Something to think about...thanks!!

[KG]

Just my two cents on this: I would think hard and long on going into a lease to buy, in the current climate. In my own experience, my fiance and I are looking for a condo/house and we found one really like this weekend. The developer met us and was overjoyed to show us around and offer us ANY kind of plan to get us in, including a lease to own plan if we couldn't afford to buy right now. However, the developer owes money for electrical work on the property (he's counting on sales to meet this) and the electricians placed a lien on the property for the amount owed for the work ($140,000).

My point is that if the developer doesn't sell any units, anyone he's agreed to lease units to could end up on the short end of the stick. For what its worth, we're still considering buying in this complex, because he did a great job with building, but we won't rent in case he ends up in worse shape than he's in now and we're out of luck.

[brownee]

Ok, i'm getting WAY more negatives than I wanted to hear! LOL

The house that we want wasn't a lease purchase, but we love it and just came up with the idea to ask if they would do that. They have said that they will if we cannot get the loan approval that we want in May. The house has been on the market a long time and has gone through several realtors, so we feel like this house is meant for us. Maybe it isn't. I don't know.  I don't want to end up in a bad situation, so we'll think more about this. The good thing is time is on our side because we live with my parents, so we don't have to be out in a certain amount of time. This whole thing could be moot if we get our scores up by May. Here's hoping!