Our Home Purchase Arrangement

We have been lucky enough to stumble onto something that we could not possibly have anticipated. Just five months after being discharged in bankruptcy, my wife and I will be moving into our very own home. It is a highly unusual situation the details of which I can only briefly discuss at this time.

My wife originally found the listing and quickly became very interested in the house. I spoke with the seller by phone and explained to my wife that I wasn't sure it was the right time or the right situation for us to buy. I told her that if something like this seemed too good to be true, it probably was. She emailed the seller and explained to her that we felt the timing might not be right and that we would have to pass for the time being.

The seller replied to my wife by email with some very encouraging, enlightening information. My wife and I discussed the situation further, prayed on it together, and told the seller that we had reconsidered and would at least see the home. We made our first trip to the home on the Saturday after Thanksgiving.

When we pulled up to the home, we were both pleasantly pleased with what we saw. The home is in beautiful condition, in a very nice subdivision, on a corner lot with a pond behind it. When the seller met us at the door, we were again pleasantly surprised. The seller was not what we had expected at all. And he had his wife with him (I should mention that the home was for sale by owner, and the owner is an investor). And again, when we entered the home, we were even more pleased. I later told my wife that, upon entering the home, I immediately had the feeling that it could be "Home" for us. I haven't had that kind of feeling since moving out of the home I grew up in.

We toured the house:

• 2200 square feet on a quarter acre lot
• Four bedrooms
• Two and a half baths
• A large walk-in closet off the master bath
• A two car attached garage
• A large bonus room over the garage, accessible from within the house
• A formal living room with fireplace
• A family room
• A dining room
• A breakfast nook off the kitchen
• A laundry/utility room that passed into the garage
• Plenty of closet space

We were both thrilled with the home and all that it offered, and felt very comfortable speaking with the seller and his wife.

While my wife spoke with the seller's wife and my kids explored throughout the house, I talked business with the seller. I was completely open with him about our situation -- the recency of our bankruptcy and what led up to it, where we stood on making a down-payment and closing costs, everything that I could think of that might impact our ability to purchase the home and/or his willingness to sell to us.

We concluded our conversation by telling the seller that we were very interested in purchasing the home, and leaving with all of the paperwork we would need to complete in order to facilitate the purchase.

We completed all the paperwork over the weekend and emailed it to the seller. I spoke with a lender and a mortgage broker on the following Monday. I was surprised to learn a couple of things:

• My credit score is actually pretty high considering the recency of our bankruptcy
• Our attorney did a very thorough job (much of it due to the information we provided) of capturing and recording our debt in the filing
• It was very possible that we would be able to secure a mortgage in six to eight months

Six to eight months, however, would be too far into the future to purchase this particular home. But we didn't despair. The seller had mentioned in the past that he was willing to agree to a lease-to-own arrangement if we couldn't obtain a mortgage at the time.

This is where the story becomes even more amazing. Without detailing all of the events in the process, let me say that this particular seller has been unbelieveable to work with. As we dealt with him very openly, he was been very open with us, as well. He told us that he had three other interested parties: two investors and a person who wanted to open a daycare in the home. As the subdivision's covenant does not allow for businesses to be operated from within the home, that cut the considerations down to two.

Clearly, the seller could choose between dealing with our difficult situation, or closing a quick sale with one of the two interested investors. He could probably have even worked out a reasonable price with one of the investors to make it worth his while. Instead, he chose to sell to us. As shocking as that might sound, the deal has already been done.

And there's more. We will be moving into the home soon on a one-year lease. During that one year, we will be earning rent rebates toward a down payment on the home. We have no security deposit to pay, and the lease will include a one year home warranty that will cover the entire property with only a fifty dollar deductible toward any necessary repairs. In approximately eight months we will attempt to secure a mortgage again, working with the same mortgage broker that helped us at first. In order to facilitate the mortgage and make us more credit-worthy, we will be securing the services of a credit repair agency (more on that in a moment), as well as opening a couple of lines of credit to contribute to raising our credit score. The seller will also report our timely payment of the rent to the credit bureaus to positively impact our credit score.

While I don't normally believe that a credit repair agency is the best way to go -- because a determined person can achieve the same results as an agency for virtually no cost -- I have agreed to such terms because it provides assurance to the seller that we are taking the steps necessary to make ourselves worthy of a mortgage in the timeframe desired. The credit repair agency could cost us anywhere from $400 to $700, but the seller will know that we are as serious about home ownership as we portray ourselves to be, and it's a small cost to pay considering all of the concessions he is making to work with us.

At the time of securing a mortgage at some point over the next year, the seller will provide to us a rent rebate that will satisfy a substantial portion of the required down payment. He will then assist with closing costs and the remainder of the down payment. We will then become true homeowners.

So, all of this sounds too good to be true, right? I know. And much of it has been cause for long and serious consideration, and lots of prayer. My wife and I both feel that this is what God is leading us to do, and we feel that he has simply blessed us with a situation that is making it possible.

The seller isn't losing any money in the deal. He'll be making over $14,000 in rent over the period of the one year lease (before rent rebate). He will then be selling the home for approximately 94% of it's appraised value. There are certainly some tax advantages for him, and he has rented the property for the past two years for a total of over $30,000 in rent. While he isn't losing money in the deal, he is certainly making less than he could.

Now, I know that the skeptical reader might say that we're being taken. I can understand how one might have that point of view. But from where I stand, and with what my wife and I have said to each other, and with what I feel that God is telling us, I truly believe that this too-good-to-be-true situation is a gift from God. Only time will tell, for the skeptical, which is why you'll just have to keep checking back for updates.