Hi yall, You guys are always helping me out, but I need your help again. I know im stupid, but needn advice. We found a house in Florida that was lease to own. This house was not liveable. So, we sign lease to own contract with this guy. He gave us free rent in exchange for fixing the house. We also gave him 1000 down. So, we turn on utilities and we are working on this house to make it liveable. This house was wrecked. Now, I am getting leary of this guy, because I found out he dont own the house. The guy who is on the deed, supposely is the guy business partner. Which I have doubts now. Get this while I fixing the house today, this couple came up to me asking for the guy (Mark is his name). He told me that he gave Mark 1500 dollars for down payment on house and never heard from him again. My question to you guys, How do we protect ourselves. Since we fixed the house and ready to move in since we sign a lease. Thank You, Charles
Do you have anything at all in writing? You're probably going to have to hire a lawyer to get this handled which can be very expensive. Since you have internet access, you can at least look at the county records and see who is the legal owner of the property. Do a search on Yahoo for your county assessor. Find out all of the facts first before you panic.
So, he signed the contract, but he doesn't own the house? Did you have a title search done? I think this is going to fall on you if the guy is ripping you off. You should always have a title search done before signing any kind of a contract to buy real property. I'm no expert in real estate, though, so perhaps someone else can give you better news.
Thanks for reply Houstonguy. We have a lease in writing. Also, we have in writing that we will be responislbe for electrical problems. And a copy of deed. But the deed is in name of different guy we dealt with. Who Mark is claiming that his business partner. I am panicing because we are fixing this house so much to live in that I have feeling someone will kick us out eventually. All the dealings have been with Mark and not true owner. Also, get this. The previous tenant who also lease to own put about 15 grand in the house, before he was force to leave. Which I heard from neighbor. He trashed the house when he left. I cant blame him if he got scammed like it seem like that i am about to be scammed.
I am learning breeze. I should of. but you know. I was needing a place to stay badly and I was hoping that maybe once in my life things will go good for me. I just have bad luck.
You are not alone - this is a common scam - they make this deal with you and then when you can't get a mortgage by the agreed on date, your lease purchase becomes just a lease, and off you go, in comes the new mark. Do they have real estate licenses, by any chance? If so, you might can get somewhere with a case. Otherwise, I really doubt it. I would sure stop putting money into it.
I wouldn't hit the panic button just yet. What are the terms of your agreement i.e. by when do you have to excercise your option? Do you have the ability to qualify for a mortgage? Have you lived up to the terms of the agreement? My biggest advice to you would be to ignore what the neighbors and anyone else like them is telling you. Just because they say it, it doesn't make it true.
The contract is not enforceable if it was not signed by the owner. Contact the owner directly to find out if they have knowledge of your agreement. If they do, get your agreements signed by the owner. Have all signatures notarized and record any option agreement. This will protect you if the owner decides to sell the property before you exercise your option. Also remember that an option agreement must have some consideration to be valid. It must also specifically spell out the terms of the agreement. Dates, amount of sale, etc. If you are not comfortable with contracts, getting inexpensive legal advice would be money well spent. It is interesting that this may have happened before at this same property. If this is a scam the owner may be part of it. If the owner claims to not know what is going on go to the D.A's office immediately. There may be a link between the owner and the person you are dealing with. If that is the case you may get your money back. Good luck to you.
Why is it a scam? The terms of a lease/option are spelled in a contract. It is an accepted way of selling property. If the tenant/buyer can't meet the terms of the contract, they should hold themselves responsible. DINKHOLT's situation does however appear to be a scam. He signed a contract with someone other than the actual owner. If I were him, I wouldn't pay another dime until the title issue is cleared. I also wouldn't spend any more money on repairs. Gib
Save all your receipts from your repair costs. If you're going to get back any money in the end (probably only through legal action) for the repairs, you need to be able to prove what you spent. -ingenue
Breeze.... Lease purchases aren't scams. They are actually a very good method for someone with bad credit/no downpayment to get into a home. It is usually spelled out very clearly that if the buyer fails to get a mortgage at the end of the lease-purchase that they forfeit their money. lease purchases usually benefit the buyer (assuming property values go up) becasue the buyer can lock in a price that may be loess than market value when it comes time to execute the purchase option. The problem is that many buyers who get into these things, many times do not understand how they work or do not read the contract they are signing. I've been the one who bailed on a lease-purchase and lost $9K. I didn't do my homework and found out later that the home prices were going down in my neighborhood and that the agreed-upon selling price was $62K (about $12K higher than market value) - so I walked, rented a house down the street for 8 months and I am now having my house built. With that said, this doesn't help the poster much because it sounds like he WAS scammed by someone who didn't even own the property. I think a lawyer is in order here.
Besides looking up the legal ownership, go to your County Courthouse and do a search for the mortgage holder,(who may be the person you dealt with) if there are liens against the house etc.If it looks like you have been defrauded you should file a complaint with your local sheriff's office,get a lawyer to file a claim of ownership against the actual owner,and whatever else that is appropriate to protect your interest and prevent eviction.
I know it is legal to do lease-purchase and land-contract deals - like I said, I'm not much of an expert on real estate. I've seen a lot of people get into deals like this, and I haven't seen any of them get the house. Most of them did the same thing this poster did - went in blind, trusting, made a "downpayment" or deposit of $1,500 or $2,000 (whatever he can get), then started putting money into the property, making improvements. I know the person who owns the properties and who does these deals. His ads say something like "easy qualifying, no credit check - why rent when you can own" and are a come-on to people who have bad credit and can't qualify to rent an apartment, let alone a mortgage. He gives them only 2 years, sometime 3 yrs if he has to, to get a mortgage, or they lose the option to buy. All the money and improvements become his, except for a small amount (usually two month's rent). When the owner speaks of the person attempting to purchase the property, he refers to them as his "tenant" and usually starts looking for a new "tenant" a few months before the option date. He knows going in that this "buyer" isn't going to get a mortgage. He has a real estate license, and he knows what he's doing. It's all legal, all the necessary disclosures are signed, and there is nothing the "tenants" can do. They can get mad, I guess, but that's about it. Once their option date is up, he tells them he really wants to sell the property, refuses to renew their lease, saying he has found someone to purchase the property outright, and the new person moves in. He's been doing it for years, successfully, and makes a lot of money doing it. The properties are never listed with MLS - they would sell quickly if they were - but they're not really for sale.
I think the onus, rightfully so, is on the buyer to accurately assess whether or noth they will be in the position to buy when the lease is up. You're right - many go in blind and trusting (I did) and don't understand what they are getting into and wind up out on the street. I also agree that the only thing they can do is get mad but I'm not certain I sympathize for them though - they really need to understand what it involves.
Another scenario. What may be happening is what is called a sandwich lease/option. The person who leased the property to DINKHOLT may well have signed a lease option with the owner of the property. Buy finding a tenant/buyer who is willing to pay higher payments and purchase price, this guy remains in the middle and collects the difference in the spread for his profit. When and if HIS tenant/buyer closes, he collects more profit on the backend of the deal. If DINKHOLT could obtain financing, the person he is leasing from would set up a double closing, or assign his contract. Gib
Breeze, You're partially correct.Something like 80% of people trying to buy on a L/O fail to obtain financing to buy the property. The attraction to selling on a L/O is that a seller can get higher than market value for it. The seller will make money either way though. Most people who have credit problems don't look at what got them to that point in the first place though. 2 years is plenty of time to get things cleaned up enough to qualify for a mortgage. Gib
This is a perfectly legal transaction. Go down to the county courthouse and record your lease with option to purchase. Then you have "equitable title" to the property. If anyone tries to sell it, the lease/option will show up on the title search and become a cloud on the title preventing anyone trying to sell it out from under you. At the very least, they will have to negotiate with you to clear title.
This is not a scam. The guy who leased to you probably has a lease option as well with the actual owner of the property, and has a right to sublet or assign his rights to the property you are in currently. The guy sounds like a real estate investor who has bought the Carlton Sheets course from the infommercials. Don`t panic, he wants you to buy. If you don`t qualify in a certain amount of time that should be stated in your L/O, then that is on you. It is a real estate transaction and if you do not qualify he will just L/O to the next person. Either way he makes money. Just try to get yourself qualified within the time frame set. Hope this helps.
