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One thing I didn't see mentioned is that when the parents pass away you will be dealing with their children. In all probability they are going to want to sell the house because they will want the cash. I think the only way this makes sense is to let them sell you the house and then they carry the mortgage. If they pass away and you are not in default on the mortgage then they have no right to foreclose. Personally I cannot imagine a young couple taking on a home this size. I still don't understand how many of the people afford to live in California. You will need to consider repairs over the years and taxes and insurance. What is your status now? Are you renting or are you purchasing you home with a mortgage? On the surface this looks like a big nut to crack.
 

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Be very very careful with this. Things change over time. Owner could pass and his heirs could say the heck with you among many other scenarios
 

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on a 650K house in Ca., the yearly taxes and insurance are going to be considerable. Who is responsible for those? and normal upkeep?
 

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Another thing about the sellers carrying the loan is that if sometime in the future you are able you can get a regular loan from a bank and pay the sellers off. Most I’ve been across though want to resist that like the plague. Doing that puts them in a pretty bad tax situation. It all depends on timing. If the interest rate drops below what you are paying the seller it would be advantageous to do so. It’s best to confer with the seller first to get their thoughts on it. That’s the respectful thing to do. In the end the seller was a helpful stepping stone into the market, so being respectful to them is best.
 

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When I think of "rent to own" I think of the places where you could rent a TV, washing machine, etc. And own it after paying double the retail price or something equally absurd. Miss a payment, late payment, whatever, they come and get it and you're left with nothing.
 

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get a lawyer and I wish you best of luck.
 

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Sounds like they want you to have it. Work out the details, contact a lawyer, draw up contract, git er done.
I think this is the key. They like you, they have an emotional attachment to the house, and they want to feel good about the new owners. There is as much emotion as cold hard facts here.

After thinking about it, I say - skip the rent to own. That was probably something the seller threw out there, hoping to get you to reconsider. Get down to the details of a sale - whether the seller or a bank finances it.
 

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I might look to skip the rent to own thing, and go right for buying it, with the seller being the bank. Not sure what realtor fees are in CA, but PA is 6%. So if you went with a RE lawyer, someone will still fork out some dough, but probably no where near what a RE agent would scoop up.
So, if the seller lists for $650000, he might pocket somewhere around $610000.
good luck with whatever you do, i have no idea how young, first time buyers can make things work with the price of homes these days.
2 things i will tell you. Dont get in so far over your head you work to live in this house. But also remember a fixed mortgage (if u go that route) really doesn't change from month 1 to month 360, taxes, insurance may change some but really the mortgage wont. But your salary is likely to go up.
I dont know anyone that stayed in their first home “forever”, but clearly i dont know everybody. Just dont rule out that you move in 5-10 years. Owning it would probably be a good thing, but where will you be with the rent to own thing? Just something to think about.

so glad i bought what i hope is my last home 2 years ago. This market is crazy.
 

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Anyone ever heard of renting to own? I’m kinda in a pickle. I’m 34 with a beautiful wife and 2yo daughter. My wife and I have so so credit. Recently my daughter’s babysitter who is just awesome is getting married and moving away. Her parents are retired, built a second home down the street and are wanting to downsize in the new home and sell their larger home. So the sitters dad approaches me and says, “Brian, you should buy our home.” Haha I laugh and say “I’d love to but I’m in no position to be buying a home at the moment. Thanks tho!” After a couple days of kinda joking around about it he finally comes to me again and says, “look, I think your family would be a great in this home. We love your daughter and you guys, and think you should buy this home.” Then he says, “we can work whatever out like a rent to own deal.” So I haven’t had a full on sit down with him on how this rent to own deal would play out. We’ve only walked through the house and chatted about the idea. Anywho, the house is 4 bedroom place, garage, built in the 70’s on a lake 10 miles from my work. It’s beautiful. And very well taken care of. I guess I need to have a sit down and get more info, but prices in California are insane. I’ve worked construction my whole life but now I recently just got into a water district as an operator. The house is on the market for $650k. Is renting to own something to stay away from? They are close family friends with a good track record. Totally solid people. Would I be missing out on a great opportunity if I said no? should I just keep throwing my money away where were renting at now and wait for the market to drop eventually? Thanks!
Anyone ever heard of renting to own? I’m kinda in a pickle. I’m 34 with a beautiful wife and 2yo daughter. My wife and I have so so credit. Recently my daughter’s babysitter who is just awesome is getting married and moving away. Her parents are retired, built a second home down the street and are wanting to downsize in the new home and sell their larger home. So the sitters dad approaches me and says, “Brian, you should buy our home.” Haha I laugh and say “I’d love to but I’m in no position to be buying a home at the moment. Thanks tho!” After a couple days of kinda joking around about it he finally comes to me again and says, “look, I think your family would be a great in this home. We love your daughter and you guys, and think you should buy this home.” Then he says, “we can work whatever out like a rent to own deal.” So I haven’t had a full on sit down with him on how this rent to own deal would play out. We’ve only walked through the house and chatted about the idea. Anywho, the house is 4 bedroom place, garage, built in the 70’s on a lake 10 miles from my work. It’s beautiful. And very well taken care of. I guess I need to have a sit down and get more info, but prices in California are insane. I’ve worked construction my whole life but now I recently just got into a water district as an operator. The house is on the market for $650k. Is renting to own something to stay away from? They are close family friends with a good track record. Totally solid people. Would I be missing out on a great opportunity if I said no? should I just keep throwing my money away where were renting at now and wait for the market to drop eventually? Thanks!
Are you sure he’s not talking about owner finance? With owner financing he will carry the note for a specified amount of time (5 years or 10 years, etc) and charge you interest. Maybe 10% to 15%. Whatever terms you agree to. For the owner financing it’s just like he’s investing his money and making interest on it. They are never a 30 year type agreement like a mortgage, they are shorter terms. Allows the buyer time to get their credit straightened out and build the ability to get a traditional mortgage to eventually buy the house at a more traditional mortgage rate. It can definitely be worked into the deal that you would have the right to buy the house anytime within your contract with him at the price you guys agree to on the house today. It doesn’t have to run the entire term of your contract and the price can’t go up on you even if the house appreciates dramatically during your contract. Yes you would be paying a higher interest rate for a while but allows you to buy something that maybe otherwise you couldn’t right now. But if he gives you a fair price, you feel the house is going to appreciate, and you are confident you can get the traditional mortgage eventually it’s not necessarily a bad thing. Especially in an area you are in, houses are probably not going to depreciate. The principle you pay every month would go towards the amount you agreed upon, start lowering the eventual mortgage you will need to acquire, and help your credit score. Obviously if you make your payments on time. Seller is protected because if you default on the contract he take the house back and sells it to someone else.
It’s a pretty common practice for real estate investors to offer owner financing so it’s nothing new or something way out of left field. He may prefer to sell it that way for now and just consider it an investment property. He would avoid paying capitals gains taxes on it right now, avoid realtor fees, and collect a nice interest payment.
For that expensive of a house it would have to be someone that is fairly well off and can afford to sit on the house as an investment. Which it sounds like he probably is.
 
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