Question: I am getting ready to purchase my first home from a private seller. No broker is involved. I am renting the house and it needs a lot of work.

When we first moved in it was agreed that it would be rent-to-own and now it has turned into a you have to get a mortgage. Since the neighborhood is popular the owners now want $30,000 more than they did before and they don't want to fix anything.

One of the major problems is that the house has mold spores in the closets. We were told someone would be out to fix this and we have yet to see this problem fixed. The roof also leaks and we don't want to buy it unless they fix at least one major problem.

Can they sell this house to us without having to fix these problems?

Answer: A rent-to-purchase arrangement usually means that some or all of the rent will be applied to the purchase price if the tenant elects to buy -- however, a buyer will still need a mortgage for the balance of the purchase price in most cases. The purchase price, incidentally, is typically set and known in advance. Do you have a written agreement which describes the sale price and rent-to-buy arrangement? If not, what do you have?

What is the attraction of this property? You say it leaks, has mold, and the price has increased.

Three thoughts:

First, show whatever written agreement you have to an attorney or legal clinic to determine what rights, if any, you have to purchase.

Second, call the local housing department to determine if the property meets code standards.

Third, get a real estate broker and see what alternatives may be available in your community. Interest rates at this writing are low compared to several years ago, so you may be able to borrow more and buy a better property.

Published: November 28, 2007

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