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Updated over 17 years ago,
Convincing parents to do a lease-to-own
First off, I have to say that I absolutely love these forums. I've lurked around here for quite a while, and learned quite a bit. These forums have encouraged me to pursue REI. Because of my continous visits to these forums, I have learned about lease-to-own.
I'm 19 year old college student (Marketing Major) in Kentucky, and I'm trying to convince my parents to try to sell their home as a lease-to-own. It's been on the market for a little under a year, and the contract with their second realtor is ending soon. They moved into a bigger home a few weeks ago, and now have to make two house payments. The first realtor brought in a recently divorced "buyer", and she had trouble getting financing, and that same realtor also knew someone that was in a similar situation, but she was never introduced to the house. This happened while the house was priced under appraisal, and fairly well above what was owed.
Fast forward to a year later, and they have a "famous" realtor who I believe is very intelligent, and is trying very hard to sell that house. As of now, no offers have been made with that realtor. Most showings come back with "It's too small!", or "I don't like the yard.", but most of the time, they can't get any feedback from the other agents. At the moment it is priced under appraised value, and right at break even plus commissions. This price is right at other prices in the immediate area, and it is definately not overpriced.
The contract is expiring soon, and I am trying to convince them to do a lease-to-own, that way it will help them make both payments because it is simply not selling the traditional way, and making a payment on an empty house is a waste of money. I'm met with the following resistance.
Mom:
I want it sold and out of our names.
It's too much of a hassle.
I'm afraid that someone will get in there and trash it, and then we'll be out the money trying to fix it.
Dad:
I need my credit to be better.
I don't have time to take people to court to get them to pay the rent.
I want it sold and out of our names.
I don't want to be stuck making the payments while it's empty.
I've told my mom, "Expand your mind a little, you're stuck in the middle class trap, you're caught up in the rat race!"
She told me, "That's exactly where I want to be."
This is obviously becoming more of a psychological issue than an economic one. I'm wanting to collect $5000 up front from a lessee, and price the rent slightly above what they are paying for the mortgage, and I believe the rent market will handle that price based on apartments renting close to that amount. The final selling price might be a grand above what it is now (maybe).
Is it worth a shot to try it in this situation, or do I have this pie in the sky dream? Are their fears legit? Do you think there is any way to convince them?
-Greg