Thursday, April 06, 2006

 

I Want to Buy My House


We are currently renting a 670 sf house in serious need of fixing up. We are hoping to be able to buy it, my dream scenario would be to agree with the landlord on a price and then simply turn our quite affordable rent payment ($960) into a house payment and pay and pay until the house is paid for. I realize I'm probably being too simplistic, any advice on buying from your landlord would be appreciated.

According to the tax man, the house is worth $236k up from $200k last year. Zillow has it at $290 but that doesn't take into account all the fixes it needs like new wiring and plumbing. There's no wall insulation, it still has original windows, the bathroom floor is soft, the appliances are outdated etc. Real Estate ABC has it at a nicer $269k, I'd like to offer the landlord $250.

A huge thing that is scaring me is that the housing bubble in Seattle shows no signs of stopping, according to an article in the Seattle Times today, 17 of 20 counties in Western Washington reported a 20 percent or more increase in house prices compared with this time last year. In my county, the median home price has jumped from $324,950 in March 2005 to $365,000 last month. I also read an article from Forbes stating that Seattle was the most overpriced city to live in "For the second year in a row, Seattle takes the top spot in our study. Why? The city does poorly on all counts, but was at the bottom when it comes to job growth, and the cost of living is very high." I'm worried that if I don't approach the landlord soon, he might decide to take advantage of the housing market and sell before we are ready to buy. My plan was to not approach him until next year when we are debt free so that if he would like a down payment it would be easier for us to come up with one.

The landlord is coming out this weekend to fix a leaky faucet that we don't have the tools to do ourselves, maybe I can test the waters and see how he feels about selling without really committing to doing it right away.

Sigh...

4 Comments:

Anonymous Trainwreck said...

It really never hurts to ask. We've been surprised more than once!

6:57 AM  
Blogger The Travelin' Man said...

A little late to the dance, but here goes...

I did a rent-to-own on my place -- a much cheaper condo in central Florida. We drew up a contract with the former owners, but our situation was a little unique. I worked with the guy -- and it was his wife's condo before they got married. She borrowed the money from her parents to buy the place originally. They wanted to get rid of it, and pay her parents back so they sold it to me for what they still owed -- which was not too much less than FMV.

We drew up a 30-yr fixed mortgage with a balloon payment after the fifth year. That gave me five years to obtain a "real" bank-financed mortgage, and it gave them a fixed time frame for when they would be able to repay her parents. The hitch was that the mortgage was at 10%, so there was an incentive for me to find my own financing as quickly as possible.

Since my credit was for crap at the time, it took all five years for me to get a traditional mortgage, and I still paid more than the going rate, but much less than 10%. In the end, it worked out for both of us because they made a tidy sum on theinterest, and repaid their outstanding loan, but the value of the condo increased by almost $20k in the five years it took me to get the traditional mortgage, so, I made out in the equity department.

6:58 PM  
Blogger HomePriceMaps.com said...

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12:03 PM  
Anonymous Anonymous said...

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4:40 PM  

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