Q: Buying apartment I’m currently renting. I still have almost three months on my lease. Should wait for contract signing?
Our landlord has agreed to sell to me the apartment I’m currently renting. I still have almost three months on my lease.
I’m assuming we can wait until the lease expires for the purchase agreement to be signed, that way I’m hoping interest rates would be a bit lower by then.
My rent is significantly lower than what the mortgage would be. Property taxes for this quarter are due in two months so they would be paid by the landlord.
However, I’m not sure if waiting is smart since the landlord wants to sell, the price is right and this is an extremely competitive market.
Perhaps we could sign the contract (obviously with a mortgage contingency) pay the deposit and put a closing date of 30 or 45 days after my lease expires.
- Does this sound like a good option? Of course the landlord would have to agree or should we just wait for contract signing/deposit etc when the lease expires?
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A:
It's exciting that you're buying your apartment! Here are some considerations and legal points under Connecticut law to help you strategize:
Strategies to Secure the Deal:
- Letter of Intent (LOI): A non-binding Letter of Intent could outline your agreed-upon price, deposit intention, and a proposed timeline for the formal purchase agreement. This can demonstrate your seriousness while allowing you to potentially watch interest rates.
- 90-Day Closing: This can give you some interest rate flexibility while securing the apartment. Remember, a longer closing period might require you to pay some form of non-refundable deposit to show good faith.
Additional Considerations:
- Mortgage Pre-Approval: Get pre-approved for a mortgage to understand your exact financial capabilities and to expedite the closing if interest rates drop.
-Professional Assistance: Consult with a Connecticut real estate attorney to draft agreements, negotiate terms, and ensure compliance with state laws.
-Market Awareness: Interest rates are only one factor. Consider broader market trends, inventory levels, and your overall financial comfort to make the best long-term decision.
Remember, you can always try refinancing your mortgage if interest rates drop significantly in the future. The priority should be securing the apartment you love at a price you're comfortable with.
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