Know How To Avoid Real Estate Buying Disaster

Posted by Lorraine Ross on November 19, 2007

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Many people think that buying a house from their landlord is a great way to go about purchasing a home. Renting a house before you decide to purchase it can be a great way to be sure that it meets the needs of your family, but if you aren’t careful you can find yourself in a real estate buying disaster.

Protecting yourself in real estate requires being informed about the ins and outs of the real estate contract. When it comes to real estate, the only agreement that exists is the one that is in writing in your contract. No matter what you and your landlord discuss in terms of purchasing the property, if the terms are not specified in a contract, then they do not exist in the eyes of the law.

When you are renting a property from a landlord, you and the landlord are bound by the terms of your rental agreement. However, when you are purchasing a home from your landlord, you must enter into a separate contract with the landlord. A purchase agreement is the type of contract that governs the sale of a property.

Some people rent a house with the intent of purchasing the home from their landlord at some point later in time. Some people rent a home and after live in it for a while decide to buy it from their landlord. In either case, it is very important to remember that rental agreements and purchase agreements are two very different things.

When you are looking at a rental house, you may ask your landlord if he or she might ever sell the house. The landlord may tell you that selling the house at some point down the road is possible. You might then comment that it would be nice if your rent money could count toward the purchase of the house.

If you are serious, you need to spell that out in the conditions of the agreement you enter into with the landlord. Don’t make the mistake of assuming that a casual conversation is one that will one day be legally binding. The landlord might not even think you are serious.

The landlord is certainly not obligated to sell the house to you based on such a conversation. Even if the landlord does want to sell the house to you, her or she is under absolutely no obligation to allow past rent payments to a down payment on the house when or if you do purchase it.

It is important to make sure that you and your landlord clearly understand each other’s intentions. There is no such thing as a binding verbal to offer to buy or sell a home. If you are serious about wanting to buy the house, make sure the terms are spelled out in the context of any and all agreements into which you enter with the landlord.

It is always in your best interest to have legal documents such as lease or purchase agreements perused by legal professionals before signing them. That way, you can be certain that you understand the exact terms of the contract. There are many reputable attorneys who specialize in real estate law.

Additionally, enlisting the help of a real estate professional or a title company can be very beneficial to you when buying a house from a landlord. Advice from professionals can help you avoid a real estate buying disaster.