By Stacey McCarthy
Q: I am currently renting a three-bedroom home in East Mayfair. I don’t have much money, but I want to buy it. My landlord does not want to sell it to me yet because he just bought it less than three years ago and said he is waiting for the house values to come back up. Can’t I just offer him more than what the house is currently valued at? I am ready to own my own home, and I really don’t want to move. I like it here.
A: First, why would you want to pay more for a house than what it is worth? There are many nice homes, not to mention great deals, to be had at this point in history in East Mayfair. I know you like it, but you could find another home that you love in the same neighborhood, maybe even on the same block. Second, your landlord has to be willing to sell it to you. It seems to me he would not be recouping his initial investment if he sold it inside of three years, in almost any market. Without knowing how much he put down on the house, or what you are paying in rent, I can’t say for sure. Outside of your landlord possibly having financial difficulties, there may not be a sound fiscal reason for him to sell it to you, even if he really likes you.
Third, if you are getting a mortgage, which you will need, the mortgage lender will do an appraisal on the property. Even if this home is super-special, if it is appraised under what they plan on lending you, then you will not be able to get the loan for this home, especially if you use a morgage program like FHA. FHA is a great program for buyers, especially first-time buyers who don’t have much money to put down, and FHA is not going to let you overpay in this market.
If you are ready to own your own home I suggest you speak to a mortgage lender, get pre-approved, and go see what other homes are for sale that you might like. Otherwise, if you really don’t want to move, you will continue to pay your landlord’s mortgage until he is ready to sell.
Stacey McCarthy is a real estate agent with the McCarty Group of Keller Williams Real Esate. Her Real NEastate column will appear on NEastPhilly.com every Wednesday.