Negotiating Rent-to-Own

Standard Rent-To-Own agreements require you to set the price of the property AT THE SIGNING OF THE AGREEMENT. That means you would set the price right now. I looked into this a year ago, but there was NO WAY I was going to set the price in last year's market, nor would I set it now. If you think prices remain the same or go up, then go for it. If not, you don't want to do this.

Ah, I didn't realize that. What do you think are my chances of negotiating a lease where I can get an additional 10 months of rent put towards a DP? Is that just being greedy?

Not sure about that. I just don't see the need (for me) to be an owner in this environment. If the home I am in drops just 10% in the next year I am better "throwing away" my money renting it for another year and THEN buying it. Your situation may be the same. ("Throwing away" = facetious)

Yeah, but if I can get the additional 10 months, then I still get the advantage of waiting a year for it to drop 10% in addition to putting rent money towards the DP. In my current lease, the price was to be agreed upon at the time of purchase, not at the signing of the lease, so if I could negotiate a similar deal, it seems to be it'd be worth it. I just am not sure what my chances are of doing so or what the pros and cons are for the mgmt company.

I know why you would do it...but why would they do it? That is what you need to know.

Right, that's exactly what I'm trying to find out in this post.

I don't think it benefits them in any way.

Damn, I thought if they were desperate enough to sell, I'd at least have a bit of a fighting chance.

Is this a house or NYC apartment? Desperation could be on your side. That would help. Otherwise I am not sure if it would be a prudent move on their part.

It's an nyc apartment. I've been following their sale listings for the year and have seen them slash prices often as well as periodically delist and then relist their sales listings. Of their recent sales, the biggest discount was about 19% from asking.They currently have 15 listings in contract, but 64 that are still for sale. I'm kind of unsure how desperate this makes them, however.

Never hurts to ask for the deal you want. Worse case scenario, you remain in the same position you are now.

True, good point.

mj201 can you email me? miscusenyapple@yahoo.com I want to ask you something and I might have a unit for you. I am not a broker, but an owner with a 1BR on the UES looking to sell.

Thanks for the note gcondo, but I'm not looking to move to the UES.

no prob! - still I would be interested to hear the terms of the rent to own contract as it might be something I would offer a renter in the future. maybe you could ask your owner to carry your loan with a low downpayment, or offer you an installment sale structure.

Hm, we looked at a rental advertising a rent-to-own option in 2009, and the owner (developers) patently refused to even consider setting the sale price. Their offer was to rebate six months of rent toward the purchase.

I guess they were hoping prices to increase, but I couldn't understand the value proposition their proposal was supposed to have. Without an agreed-upon price, what would have stopped them from saying the "new price" was the old price + 6 months rent? (Nothing.) So it was pretty much a worthless perq.

That's a good point, lad, though, that might be easy to spot and call them out on with comparables.

Rent to Own: When a delusional seller meets an unqualified buyer.

Even though price is usually negotiated in advance, there's no reason you can't re-negotiate while renting. My rent-to-own experience worked out really well for me. If you find the "perfect" place, you can get it off the market for a year by rent-to-owning, and then haggle until you get the deal you want.

Cool, thanks for the tip. Was it really hard to re-negotiate the price on your apartment?

Rent to own: When a delusional seller meets an unqualified buyer

I thought presidents were supposed to be astute? Oh, yeah, never mind. Well, seeing as financing is getting harder to qualify for, and that trend may continue, so many more buyers will be "unqualified". Further, I wouldn't say delusional seller, I'd say seller with 100% equity who can afford to hold out for top dollar. Should the renter/buyer default, the owner hasn't lost anything, but a month or two of rent. Why discount a property to move if there's no need?