The popularity of Rent-to-Own arrangements has grown during the past few years. Because somewould-be home buyers have suffered the direct consequences of the widespread economic downturn and slow recovery, rent-to-own deals can rescue transactions that would have been impossible through regular purchase and mortgage financing arrangements. If a potential buyer’s cash flow seems strong enough to support an eventual purchase, rent-to-own can overcome credit or cash shortfalls.
In a typical rent-to-own deal, the landlord and tenant execute both a lease and a sales contract at the same time. The tenant usually pays an option fee upfront as well as an agreed-upon amount in excess of the rent payment each month. The landlord applies these additional payments toward the tenant's eventual down payment. As a result, the tenant no longer has a feeling that he has nothing to show for his monthly rent payment, and the landlord has current cash flow plus the warm feeling that at a time certain his property sale will be completed. Everybody is delighted.
However, there is always some potential for less than smooth sailing in a rent-to-own deal, and all parties should be clear about what they are.
The primary risk to the tenant/buyer in the kind of rent-to-own structure I have just outlined is the possibility that the tenant might not be able to complete the purchase at the end of the option period. When this happens, it usually results in the tenant's forfeiture of both the option fee and the payments made in excess of the rent amount -- money the tenant could otherwise have saved or used to resolve credit issues.
There are also a number of ways to make a rent-to-own deal more favorable to the tenant. The first is to make the option fee applicable to the down payment if the tenant purchases at the end of the option period. In addition, the contract can allow the tenant to assign the purchase option in the event that he is unable to make the purchase. This way, if his real estate agent can find another buyer, he may recoup some of his investment. Such a contract might also entitle the tenant to a refund of a portion of the value of improvements he may have made in anticipation of purchasing if he is unable to complete the purchase.
Because a rent-to-own deal can have many possible details, both tenant and landlord are well advised to work closely with experienced real estate and legal professionals from the outset. Our office is here to furnish the knowhow that helps turn rent-to-own and other real estate possibilities into realities.
Since the start of the economic stall, many sellers and their agents have found it more useful than ever to keep a steady eye on the changing priorities among home buyers. It’s not surprising to find that the Columbus,Ohio home buyer is likely to have grown both more critical and more practical when it comes to making that important buying decision.
At first glance one of the biggest changes may seem surprising, but it really shouldn’t be when you stop to consider the reasons behind it.
A recent survey shows that more over 85% of home buyers (even first-time home buyers) now prefer a move-in ready house -- one that needs few or no repairs at all. While you might have supposed that the tight economy would cause bargain hunters to head for the lower-priced fixer-uppers in order to save money, the opposite is true. The reason is reality-based. In light of today’s tight lending standards, many prospective home buyers are being asked to come up with more out of pocket cash than was previously the case. When you add the probable cost of repairing or updating a home, the value of a move-in ready home becomes more readily apparent.
The conclusion is clear: if you want to sell your home, be sure to perform basic fixes before coming to market. That means no leaks on the bathroom floor or from the faucet, no squeaking doors or broken windows, fresh paint, clean surfaces!
Another hot button for local home buyers is the golden oldie: the value they get for their money. Although it’s always been the case, it is certainly true in this economy . If the price is right, potential home buyers will go after your offering. When pricing a property, take into consideration all of the important factors, just as canny home buyers will. Consider the condition of the house, its wow-factor features (both those it has and those it lacks), and finally the price of neighborhood competitors. Since location is a true buyer hot button, don’t be shy about exploiting any high points like desirable distances to shopping centers, nice schools, or employment opportunities.
Extra time on market can be expensive, so avoid the mistake of pricing high “just to see.” That extra 90 days on the market can cost you!
It is vital to know what potential buyers are looking for to understand what will be perceived as the strongest points of your own property. Once you identify the hot buttons for home buyers, emphasizing your home’s strong points will result a higher sale price. Contact me today to discuss the latest news about what the home buyers in your neighborhood are saying.
Today's Home Buyers’ Hot Buttons
The bedrock of the residential real estate industry is the American Dream of owning your own home. But the current market has seen a sharp rise in another facet of the industry: the ‘strictly business’ opportunity created by the rise in foreclosure listings. Everyone from first time buyers to seasoned investors are newly aware that housing market conditions warrant a serious look at the unusual bargains that are opening up.
The appeal is understandable due to some commonsense consequences caused by the mortgage meltdown (and the headlines that followed). When banks come into possession offoreclosed properties they find themselves in an unenviable position. Incented to sell them as soon as they can, they aren’t free to wait until the market rises to meet historic price levels. As a result, mounting numbers of those foreclosure listings are carrying price tags that are a fraction of their original market price.
For homeowners who see a second home as a path to create a passive rental income stream, foreclosure listings comprise tempting investment vehicles. And for first time homebuyers, the information in the same foreclosure listings can mean nothing less than a foot in the door of homeownership.
In both cases, the first step to buying a bank-owned property comes with finding reliable foreclosure listings. Looking for a trustworthy source means finding one that features up-to-date and accurate information. Too many dedicated “foreclosure” websites offer endlessly duplicated, incorrect, or woefully outdated information. Relying on them can send would-be buyers on a frustrating series of time-eating wild goose chases that end up locating houses that have already been sold.
One way to test a source of foreclosure listings is to take advantage of free trial subscriptions where they are offered. It’s a money-saving way to determine whether a foreclosure source can be trusted to include attractive properties listed soon after they come on the market. The good news is that the online field is developing rapidly -- so much so that it may even be possible for you or your agent to inquire (or even begin negotiations with the bank) through the Internet.
In any case, the opportunities that foreclosure listings represent also carry special characteristics that canny buyers need to take into account. Home inspection rules are one example. Banks are under no obligation to disclose information about a property’s flaws in the same way that regular homeowners must, so it’s imperative to make a physical investigation of a foreclosure listing before proceeding further.
If you are curious about your chances of finding a great deal in todays’s foreclosure market, I will be happy to send you foreclosure listings as well to help you identify any and all that may fit your goals.
Foreclosure listings: What you should know.
Homeowners Helping Sell a home
It’s winter – the days short, the weather chilly - and unless you are someone who is trying to sell a second home in a trendy ski town, the chances are good that around here you know your home is not listed at the best time of year to sell a home.
Fear not: with the right agent, the right pricing, and the right approach, homeowners still have several things they can do to help sell a home no matter what the time of year.
Show Your Bills
If you have made energy-efficient improvements to your home -- like added insulation, dual pane windows, a new energy efficient furnace, etc.-- this January market is the time to brag about it. Collect data on the average utility bill at this time of year and compare it to your actual bill for display to potential buyers. Significant savings year after year can be a big draw and help sell a home in this time of year.
Crank the Heat
While we’re on the topic of heat, nothing makes a potential winter buyer warm up quicker than – you guessed it - a warm, inviting home! Comfortable homes also feel well cared-for and lived-in: that’s something buyers will not find in discounted foreclosed or REO homes they may also be viewing. Few things send a buyer out the door quicker this time of year than a chilly house, so make sure that part of your routine preparation for a showing includes keeping the heating level generous.
Shovel, Shovel, Shovel
Few chores are as labor-intensive as shoveling snow, but if you want to sell a home in any wintery climate, this is one step that can’t be shortcut. Do you want buyers slipping and sliding into your driveway? Or considering how much work it would be to keep your entrance clear this time of year? A buyer may not fixate on whether or not the front steps were clear, but she will remember if she had to push through snowdrifts to get there. Keep your entrance clear and you will help keep similar nagging thoughts off buyers’ minds. You want to keep their concentration back where it belongs – falling in love with their future house!
While the season may be beyond your control, the right approach to sell a home can make all the difference. If you are intending to sell a home this season, give me a call anytime. I’ve got a game plan for the market this winter -- and together we can make it happen!
Financial experts insist that they don’t have a crystal ball, but they still have to predict the future anyway. That’s why they watch a number of different economic indicators to determine the direction they expect different segments of the economy to head. For the owners of rental homes and their tenants, one of the most important segments is the one dealing with rents – will they continue to rise in 2012? If, as many experts predict, rents do continue on an upward path, it will mark the third straight year that they have done so. Landlords needn’t ignore the trend.
While the year is still too young to have established many economic indicators, here are some to watch for to help you make your own prediction regarding rent price trends that may affect your own decision-making:
To slightly balance those indicators, other signs could hint at a possible future stall in rental rates:
The big question is, if rental home rates do continue to rise in 2012, how much can owners and renters expect? While the majority of analysts agree that residential rents should continue to rise, they vary when asked how much – from 2.5% to 5.5%, depending on which one you ask.
NOW IS A GREAT TIME TO BUY A HOME
I have been the REALTOR® of choice for buyers and sellers since 1979. I specialize in helping first-time homebuyers, new families, single families and more in Columbus real estate.
I am a certified REALTOR®, agent and broker for top-rated Columbus realty firm Vision Realty, Inc. I bring my clients 32 years of experience and dedicated service, 21 of which have been spent building a reputation of excellence at Vision Realty. I assist both buyers and sellers in the Columbus area, primarily serving two story single family home, townhouse, ranch, multi-level/split level, short sale, and bank owned property transactions.
My military background has prepared me to both meet—and exceed—these expectations and requirements. My service to my country is a unique preparation for my career, and attests to the level of proficiency, experience, and personal dedication I bring to my clients and profession, allowing me to handle real estate transactions with the savvy of a skilled businessman and the honor of a friend.
As a military and family man, I am no stranger to hard work, see the honor in service to my community and my neighbors, and it is this principle and work ethic that are the key personality traits on which I have built a solid reputation and practice. My dedication to my family, church and civic duties have endowed me with the ability to truly listen to the needs of my clients, bringing my clientele a peace of mind that is priceless. My practice has weathered the storms of the real estate market over the past decade and emerged strong—it is a home that he has built on a solid foundation of trust, respect, honor, integrity and experience.
I personally understand the challenges and stresses of searching for a home, brokering real estate transactions and the general upheaval of moving. My goal is to provide my clients with the type of service I would like to receive, while bringing an element of fun to a process that is generally laden with frustration.
Combining the latest in marketing information, advertising savvy, effective negotiation skills, a high-quality professional network and an in-depth knowledge of both the community and the market at large, I blend creativity and professionalism, which has earned me both a loyal client base and the respect of my peers.
Patience, persistence and integrity are the defining elements of how I handle transactions from first meeting to closing, bringing my listening skills and clear communication to every transaction to ensure a smooth, stress-free closing. I don’t simply serve my clients; I am committed to meeting the needs of my new neighbors.
When choosing a REALTOR® who is knowledgeable, experienced and personally committed to reaching your goals, one need look no further than me. What’s your vision?
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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