Rent To Own Negotiating?

did u find out any info on this? I'm looking to rent to own in williamsburg

I did, and I think my terms were pretty great. 100% of first year's rent taken off pre-agreed purchase price. No obligation.

I haven't looked into this but isn't this of little value if the reference purchase price of your call option on the apt is way above realistic price of the apartment (and that is the likely tactic of the seller granting you this). So, what's the point? If you were planning on renting anyway, I suppose you could say it is no harm, but it is very unlikely to be of any benefit, at least that is my guess.

djradon...what was the reference price agreed relative to peak pricing?

Any one try this with a unit they were already in contract for? In that case, would you apply the down payment to rent or just build up more equity you could put towards the purchase?

How could this be structured so that there would be a closing (something that's important to the developer)? Could one close using seller financing and then structure some rent-to-own option in that deal?

Originally listed at ~$820K, couple reductions to ~$650K when I put in my offer for ~$625K. Agreed on ~$635K rent-to-own. I think the owner would have accepted ~$600K if I'd agreed to purchase immediately, which is about what I'll pay after deducting a year's rent. I feel that ~$600K is a fair value in current market.

The point is:

- if after a year apt is worth less than $600K, I can put in a new offer. I'd lose my rent, but if I go ahead with a purchase at the lower price, I'm still "saving" money compared to purchasing now. (This is the most likely outcome, IMHO.) The further the price drops, the more I'll save. Essentially, I'm protected against the downside.
- if market recovers, I'm protected on the upside by locking in current price
- if I lose my job or change my mind about owning, I'm under no obligation
- try-before-I-buy makes it easier for me to decide if it's worth it
- this unique, "almost-perfect" (for me) condo is off the market, waiting for me if I want it, while I save up for a larger down payment and attempt to lock-in the best mortgage rate.

Forgot to mention above that my security deposit counts towards the down payment.

Well, with such substantial price reduction already it makes some sense. I suspect in many cases the reference price will end up being so far from one year out reality that there will be no benefit to the rent to own. In your case , if we accept that you got near the current sensible market price, then you will benefit from the very slight (in my view)chance that prices will not fall much further, but most likely it will end up being irrelevant because prices fall further than the strike price (my guess).

djradon, did you negotiate this in williamsburg?

yes.

I see jim's point, but I think he underestimates the benefit of being able to renegotiate after a year if prices fall more than the "rental equity" I've accumulated.

djradon -- what's the benefit to the developer of this arrangement? is he able to rent at a higher price b/c of the rent to own angle?

i agree, it seems like a winner for you since you can walk away and lose nothing.