NWR-Real estate question

SuperRNluvsChef

Ok ladies here's the deal.  FI and I moved from SD back to MN and currently live with my mom and stepdad.  We looked at townhomes last week with a realtor.  Except I don't want to buy a townhome, I'd rather buy a house, because I don't want to pay association fees on top of everything else.  So the realtor said he'd look up some houses in the price range (we we're already approved by a mortgage co) and we could look sometime soon.  Fast forward to yesterday I went to finally see my BFF and MOH.  Her mom had just gotten remarried and bought a house with her new husband.  I asked MOH if her mom had sold her house yet and MOH said house is still on market for about 10000 below our max for what we can afford.  My MOH emailed her mom about it and her mom replied that she would be willing to take it off the market and sell it to us privately for "a whole lot less" than what she is currently selling it for.  She also said we could even rent it from her for awhile.  Since we don't really have the $$ for a downpayment right now (that pesky wedding! LOL) I was thinking about renting it from her.  Thoughts? Is a private sale a good idea?? FI and I are kind of clueless with real estate stuff.  TIA ladies!

wittyschaffy

If you do a private sale, you might want to see if you can at least hire a realtor to do the paperwork so you know you're in the clear.  The comission doesn't come into play then, you just pay them outright for their time helping you with forms, etc. 

bellaxanthe

Yup either a realtor or a lawyer to read thru and make sure the contract is good.  You will save a bit on closing costs, but still be prepared to have some money that you are going to have to throw at that.  You might be able to wrap it into your loan or get the seller to pay.

I'd rather you bought mine, but this sounds like a pretty good deal. Is the house something that you like or is it just a good opportunity?

SuperRNluvsChef

No I really do like the house.  It's 5bedrooms/2bathrooms.  So very big and the price is awesome right now.  Thanks for the advice ladies!

shan87

No Help, but GL!!

SSaltzman87

Your realtor can just serve as a consultant, and then just pay your realtor a fee for that instead of closing costs.

My parents actually just did the same thing that you're thinking about doing :-D

leggwilliams

I hope it works out for you! Yay for a house!!!

Steph0871

Oohh a new house! How exciting.  I agree with PPs, though.  Make sure everything is legal and documented.

bellaxanthe

After thinking more about this - I would still want to get and inspection. Layout what comes and doesn't with the house when buying (appliances, drapes etc). I'm sure with the closeness of the relationship, you won't get duped by this friend. I think you just have to know what you are getting into and if there are reasonable things that you should expect to repair/replace within the first few years, you should know and plan for this upfront.  If you do a rent to own, how will that work? Will repairs be by the current owners or would you now assume them.  How would insurance be handled at that time?  When you buy a home, count on spending a good amount on "making it yours" and on buying necessary items like lawnmowers, rakes, furniture etc the first year. I spent about $10,000 over the first 2 years that I never would have, had I stayed in an apartment. I don't regret it, I just didn't plan for it very well.

I currently am very very glad I bought at the low end of what I qualify for. I didn't know that life was going to hand me a 25% paycut a few years ago. I managed to keep my home because I was a bit frugal.  If you can get this house down to a more manageable price- go for it!  Very exciting and it sounds like a nice large place that you could be happy for years to come.

SuperRNluvsChef

Thanks ladies! I'm not too worried J and I have been BFF's since 5th grade so I know her mom is basically like family.  I'm just excited, even if we have to rent it I think it's too good a deal to pass up! I'll keep you ladies posted!

honeybear25

I wouldn't rent or buy a townhouse.  Rent a townhouse yes but since the opportunity has arised seize it!  If it is really somehting you will want to be in ten years from now why waste your money renting?  It may save a few thousand now in the moment but it's not worth it long run in mind.  Fi and I are in same boat with wanting to buy because we know for what we pay to rent we could own.  But as others said don't forget to factor in cost of ownership with utilites and unexpected fixes ect.  In this market you want to be a little prepared in case life throws ya a curve ball ya know?  Good Luck should be fun to build your home with your FI!

strangisj

If you want to do a "Rent to Own", it's called a Contract for Deed. They are becoming more and more popular these days because the owner of the house acts like a bank! You can negiotiate the amount of the down payment with the sellers and then figure out when you would owe them the full amount (most are 5 years-that's when youd take  out a loan from a mortgage company and fully "owning" the house. DEFINITELY get an inspection, because you never know what could be wrong with the house. Even home owners may not know of a problem. But highly recommended! Then you can go back to the home owner and ask they to fix this and that.

To transfer goods in the house, have your realtor draft up a Personal Property agreement. That legally transfers all the things in the house such as the washer/dryer, range, fridge, etc.. 

If you have any questions, definitely let me know! (I'm a realtor with Edina Realty!) Good luck! It's a fun process to go through( and very educational!)