Legal Question in Real Estate Law in Minnesota
Writing a lease with an option to buy
I wish to make an offer on a house but since my credit is poor (a 3-year-old bankruptcy and a 2-year-old foreclosure) I can't find an affordable loan. The house belongs to a deceased woman and her children are selling as part of the estate. How do I go about writing an offer for either a lease with the option to buy or a contract for deed. Which should I propose. What are the differences. They have not as yet put forward these as an option in the advertised price.
1 Answer from Attorneys
Re: Writing a lease with an option to buy
Contract for deed would be the better of the two choices you mention. If the property is leased you would loose the homestead status and the property would be taxed at non-homestead rates. The effect is usually to about double the real estate taxes.
Under a lease if you miss one rent payment, you can be evicted within a few weeks. With a contract for deed it takes at least 90 days to cancel the contract when you are behind in payments.
There's no doubt contract for deed is the better choice.
A mortgage would be even better. Many brokers advertise their skills at finding mortgages for people with bad credit. If you have not gone to the yellow pages and called a few of them, you should not be assuming that you really can't get a mortgage.
Good luck.
This response is for general information purposes only and does not create an attorney-client relationship. You are advised to consult the attorney of your choice concerning the details of your case.
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