[charlottesmum04]

DH and I cant afford to buy for another 12 months ( well not cant afford I'm self employed and need 2 years financials) and in 2 years our financial situation would change dramatically for the better ( both DH and I finish study in 2 years) and the house we could afford in 2 years would be alot more than the house we could afford in 12 months. Because of this DH and I had settled for continuing to rent and adding to our deposit money for 2 years and then decide to buy then.

However the market at the moment here is really good for buyers. Seriously good if we could get the mortgage now we could get what we wanted for about $300K or what we could live with for about $260K. Because there are so many sellers and not as many buyers there are sellers getting more 'creative' about how to sell and through mutual friends we've been offered a rent/buy scenario that would allow us to rent for 2 years while technically putting further 'deposit' on the house, with the reality is that it would just reduce the selling price.

The thing that isnt making me jump on this offer is that its more house/more money than we 'need' its in our want price bracket rather than need price bracket. However its 1000sqm of high density residential land a street back from the beach which I am thinking would be a bloody good long term investment. Adding to the complications is the fact that we are not shopping for our 'forever' home. My kids are older and my older daughter will have left home in 5 years, and my youngest is 50/50 custody and will probably move out in 7 years ( most kids move away for uni) DS will probably live wiht us forever due to his disabilities so plan was in 2 years buy something cheap but big, slowly renovate and then sell in maybe 7 years and buy something alot smaller for just me DH, youngest DD with maybe a granny flat for DS.

So EB do we stay here and rent or take the plunge?

[Madnesscraves]

keep renting.

ITs hard because you really want to get a house to call your own, but really, no rush. save up and get a new house 10 times better in 2 years.

[Rubyduck]

It depends on the house and location really, if I loved the house and location and lifestyle it would offer then I would probably go for it knowing each week I paid rent I was decreasing the sale price but in saying that a lot can change in 2 years, will there be a legal agreement in place it make sure the seller doesn't change their mind and sell it from under you before the 2 years is up and your ready to buy???

[charlottesmum04]

It depends on the house and location really, if I loved the house and location and lifestyle it would offer then I would probably go for it knowing each week I paid rent I was decreasing the sale price but in saying that a lot can change in 2 years, will there be a legal agreement in place it make sure the seller doesn't change their mind and sell it from under you before the 2 years is up and your ready to buy???

Absolutly legal agreement made. We have been going back and forth with terms we both want in a non formal way for the last 2 weeks and when we are all finally happy then it goes to the lawyers to get properly drawn up. On the condition that until its signed house is on the market and likewise we can pull out until its signed if we cant come to an agreement about terms.

[Femogan Boop!]

No. I wouldn't buy now. House prices are still dropping almost everywhere in Australia.

The house you lock into now is likely to be much cheaper in 2 years.

I agree with your DH. Saving your money for the next 2 years to have a good deposit and then buying is the best option. A big deposit saves you money on mortgage insurance and it drops the repayments of your loan.

[qak]

The house you lock into now is likely to be much cheaper in 2 years.

Personally I think this is a high risk assumption. I would buy (with the rent for 2 years scenario)!

[MrsLexiK]

The house you have described sounds like our dream house I am in an area where house prices haven't dropped at all over the years (maybe other suburbs have in the area but not ours), we've had a couple of houses be sold twice since the GFC in a few streets in our estate and each time they have gone for more then before with no improvement.

I do know someone who did what you are thinking of doing, however her parents had to pay capital gains on the whole price including the "deposit" they had paid - I would ensure that if you go down that path that the other party ensure the agreement is wordered correctly so that that does not happen as I could see that being an issue for friendship down the track.

I would be looking at the price of the house now, and how much you think you will be spending on renos over the 7 years. Will this house need anything done in 7 years time or will you be able to sell it in 7 years and be able to afford the smaller house with a granny flat?

[Cirrus]

(These are Qs to consider - I'm not asking you to give details)

Would this couple sell you the house if you had the money, or is this a way for them to make extra money from people based on the fact that not everyone is in a position to buy?

I would not assume that they are just being creative but that they are looking to get more money out of their property than they would either selling or renting it.

Obviously the benefit to you is that you could decide not to buy it after 2 years with less consequence than if you had already bought a place and changed your mind. However you sound pretty certain about being better off - so this may only be relevant if house prices drop and you decide to get something else. What kind of loss would you face at that point from the extra money you'd have spent on this place?
How do the weekly payments compare to rent for something similar? Would you be better off saving?


You could use some home-loan calculators to work out how much total interest you would be paying if you bought now for the asking price on this home. Then compare that to the extra costs with the rent to buy scenario.
Hopefully the extra money you will give the owner will not be many times higher than you would be giving the bank in interest.


House prices may go down. House prices may go up. With each housing option (wait 2 years or buy this one) think through the worst case scenario and how you would cope with it.

If the rent you are paying now is similar or less than the interest you would be paying on a similar house - if I were you I would save money rather than taking a gamble on the current house prices being as low as they'll go.

[*cough*]

House prices are rising in Perth. Just read the report the other day. Don't assume it will be cheaper.

[Sweet like a lem...]

Buy. Rent money is dead money. Don't wait until the market reverses again and you're paying more for a house than it's actually valued at. This is what happened in 2007 and people now are sitting with massive mortgages on properties where even in a reverse market they will never get back what they've paid.