Todd MacMillan, ABR, CTA, ERS, GRI

Many homeowners are looking to renting their current property in order to make a move. We must all keep in mind that this may not be as simple as it seems. Our Clients need to be informed of the potential risks involved. Most homeowners carry a mortgage that is intended for their primary residence. In most cases, one cannot simply rent their property. Lenders take mortgages based many factors. One of which is the fact that the secured property will be the primary residence and the borrower will live there. If a buyer intends to rent or lease property which they have purchased, the buyer would usually require a different type of mortgage, like a Commercial Mortgage for one example. Different rules and rates will most likely apply for investment-type loans.

Most residential mortgages contain an Alienation Clause and an Acceleration Clause.

Acceleration Clause: A provision in a Security Instrument (Mortgage) that allows the lender to declare the entire debt due immediately if the borrower breaches one or more of the provisions of the agreement.

Alienation Clause (a.k.a. Due-on-Sale Clause): A provision in a Security Instrument (Mortgage) that gives the lender the right to accelerate the loan if the borrower sells or transfers a significant interest in the property without the lender’s approval.

A significant interest in a property can be considered the "Right of Possession." When renting, the owner surrenders that right to the tenant. This may trigger the Alienation Clause, which in turn may trigger the Acceleration Clause.

We licensed Real Estate Professionals must provide this information to our clients. It is my strong opinion that a client is to be informed that they should contact their Lender before they rent their property. Additionally, a call to their Homeowners Insurance Provider to see if any additional riders need to be purchased to protect the property while rented is in order. While at it, it would be a good idea for them to contact a Tax Professional as well to review the implications of rental income on their overall tax position. Perhaps having a form that states information such as this that your client can acknowledge would be a good plan. Talk to your Principal Broker or attorney about this.

If these issues are not properly conveyed, a client could very well end up in a terrible position. Then whom do you think they will look to for blame and/or restitution? YOU!

To all of my fellow Realtors out there, here is a bit of a wake-up call. If you are using a free email service such as AOL, Yahoo! and any other that places ads at the bottom of your emails, you may not be getting through to your intended recipient!

SPAM is a huge issue for internet users these days. The statistics are mind-boggling. According to SpamCop.net, there have been 3,839,116 SPAM messages sent in the last 24 hours. This is averaging 64.2 messages per second. Last year they estimate that 1,014,443,942 SPAM messages were sent. This is about 90% of all the messages sent. This is on the rise every day. As Security providers such as McAfee and Symantec add to their filters, less and less is getting through. Good news... usually.

Again, if you are using an email service that places ads on your emails, you MUST follow-up with a phone call. You contact with other Realtors and Clients can be crucial to your Buyers and Sellers! "Time is of the Essence" and where does the time go if your message is not received? Many of these email messages will be filtered into SPAM or Junk-Mail Folders, never to be read. It happens all of the time. Depending on how users have their email clients, like Outlook for example, set-up, these messages could be automatically deleted. "Didn't you get my email about it?" "No, I have not gotten anything from you." OOPS! Opportunity missed. Credibility and reliability are out-the-window!

Free email services are not free! These ads on the emails are how the provider makes money. If an end user clicks on the ad, the provider either makes a few pennies per click or if they actually buy the product or service. You are doing their marketing for them every time that you send an email.

Get smart and get an email account that does not have such ads. Most Realtors with National and Regional Brokerages have access to email accounts through their brands. If not, buy a domain name with email. You can usually get one for as little as $10 per year. You do not need a web site to have your own email address without any ads. Not to mention, you will look for professional! If you would like more information, feel free to email me... with any luck, I might just get your message.