Decisions, decisions HELP-LONG

So we are renting a house now. We moved to the area almost 3 years ago(NC) and found a house we used to rent. It then got sold kind of quickly which we were not prepared for so we rented the house we are living in now. Our plan was to buy a home in the next year after doing some research on taxes, schools, etc.

Well our landlord sent us this e-mail yesterday:
I hope everything is going well with you. We had talked a while back and you expressed some interest in buying the house. K and I want to move forward with other ventures and would like to know if you are still interested in purchasing our house. The agreement would be between us. I would not include realtor and I would have a lawyer draft the agreement. If you are interested we would draft an agreement that would give you credit for your future rents toward the purchase price. I'll forward the rest of the details upon your request if interested.

I responded with a few questions and this is what he sent back:


Selling price $249,500. We would have an attorney draft an agreement stating we would give you credit for all future rents through the end of the lease and a closing before Nov 1st.
Figuring April through Oct (7 months) that would be $9625. We would ask for $3000 at time of signing. That would be the equivalent of $12,625 reducing your price to $236,875 to finance.
The actual closing wouldn't take place until Oct 2011. By doing this it passes on what we would pay XXX realtor in realtor fees to you. They would get 5% or $12,475 on selling price of $249,000, plus it let's you build that amount over 7 months as or part of a down payment.

Positives:

Can build up a DP over time
Can try and improve our credit scores more in that time so we can get a great rate
Nice(not perfect) house in a great neighborhood with year round elementary-which we think will work for us
Good neighbors for the most part
Children on the street that are my children's ages
Close to MIL and FIL
Convenient to highways
large private property 3/4 acre

Negatives:

The house is surrounded by trees. It does not get a lot of natural light-this is a big deal for my DH less so for me

Because the house is surrounded by trees there is a lot of yard maintenance

The setup is not optimal. the downstairs is a weird configuration. Tiny dining room, tiny living room and a den connected with a wall in between. We would probably have to do about 20k minimum to reconfigure to our needs. BUT it is livable just not optimal.

So what do you think? Should we look for or "dream" home or is this too good of a deal to pass up?

Pic of the property

Re: Decisions, decisions HELP-LONG

I would want to know what he is a basing the $249k selling price on

comps?

or what he wants out of the property?

Re: Decisions, decisions HELP-LONG

have you looked at other houses at all? do you have the funds now for a down payment and closing costs? if you don't sign the agreement, i guess they will put the house on the market and you will have to move when the house sells?

honestly, it sounds like a good deal (i don't know how fair the price is for the area) but if you don't love it, i would consider looking at other houses. see what else is out there. you may find something else that you like much better. and even if the timing isn't right, you can wait it out a little longer and then find a house you love.

Re: Decisions, decisions HELP-LONG

I don't know.

If you like the house a lot and the price is fair, than it could be a good way to become a home owner.

However, if you are iffy on the house I would go house hunting. Maybe not to buy but to get an idea of what is out there for when you are ready. If you find a bunch of houses in the price range you will be looking, then maybe pass and rent something small to save up money faster.

From the aerial it looks great

Re: Decisions, decisions HELP-LONG

I agree with the above.

I know I sound very anti-green here, but if you really hate the trees and buy the house, you can always cut a few of them down for more light.

As a first time home seller I would say the best thing to do is to give some thought as to how long you would stay in this (or any) house. If it's not your forever house i would try to think about how marketable the house is for when you go to sell it. We bought a mint house that was perfect for us with the plan of selling in 5 years or so. Granted I know this is a stinky market but i didn't think about prospective buyers in the future - as a loft style house, i knocked a lot of buyers out of the running because they wanted a three bedroom with four walls in each room. I think we were blinded by the condition of the house - it was far nicer than any other and we were shocked it was in our price range. We were lucky enough to find a buyer who offered us a fair price but looking back, we should've been thinking differently when we looked.

Re: Decisions, decisions HELP-LONG

if trees are a major drawback to you and they are on your property- can't you just cut them down??

Re: Decisions, decisions HELP-LONG

Re: Decisions, decisions HELP-LONG

Re: Decisions, decisions HELP-LONG

Re: Decisions, decisions HELP-LONG

Posted by CrankyPants

I don't know.

If you like the house a lot and the price is fair, than it could be a good way to become a home owner.

However, if you are iffy on the house I would go house hunting. Maybe not to buy but to get an idea of what is out there for when you are ready. If you find a bunch of houses in the price range you will be looking, then maybe pass and rent something small to save up money faster.

From the aerial it looks great

Re: Decisions, decisions HELP-LONG

The lack of natural light would be an issue for me. Honestly it sounds like you are considering this home only b/c you currently live in it and it would be "easier" to attain. However, the question is, if you did NOT live in it, would you still be interested? If no, then pass it up and look for your true dream home.

Re: Decisions, decisions HELP-LONG

Couple of ideas:
-Go to a few open houses and see what is out there. Then you can decide if you really like this house.
And, what if you go out looking and find something really great? Maybe his proposal is a push to get you out there to find some thing even better??
-If trees are a concern for you, get some estimates for tree removal (even if just over the phone and price ranges)
-Do you know any local realtors? With permission from your landlord, can they come by and give you a free appraisal?
Ask around. You said he couldn't sell the house for that price, why?
-Get your own attorney. You need someone to protect you. You might be able to discuss your concerns with him/her.
-Think about getting the house inspected. While you are living there, I'm sure they are things you don't notice b/c you are renting.
-Finally, DON'T RUSH. Tell your landlord you need some time to think about it and to do some research. This will let him know you are serious but smart.
Sure it would be easier for him to sell you the place but this is a big time investment. You owe it to yourself and your family.

GOOD LUCK! Keep us posted!

Message edited 3/8/2011 7:10:46 AM.

Re: Decisions, decisions HELP-LONG

Just to address some questions. A big draw to buying this house is not having to move(we've moved a LOT) Also the fact that it basically doubles the current DP we have saved or alternatively, lets us use that to do some improvements.

We will be having a professional engineer inspection, appraisal and getting our own attorney.

Thanks for all the feedback thus far.