HomeRun Homes Rent to Own Homes Blog

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HomeRun Homes is a centralized marketplace which helps people Find or Sell a Rent to Own Home, both Nationwide and Globally to the thriving Rent to Own Market. http://www.lease2buy.com

February 27, 2012

January 2012 Home Sales - New vs. Existing

Hi Folks,
   Welcome Back !

   In a report this week from the Department of Housing and Urban Development (The "HUD"), sales of new single-family homes from December to January were down almost 1% (3.5% above January 2011), and during the same period of time, Existing Home Sales were up 4.3%, which marked 3 gains in the past 4 months, per the National Association of Realtors (or, "NAR").

   Lawrence Yun, NAR chief economist, attributed the strong gains in recent contract activity to buyers that are responding to "very favorable market conditions". Yun said that the "uptrend in home sales is in line with all of the underlying fundamentals", and Yun names a few of them, such as "pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”

   Taking a deeper look at the figures for Existing-home sales, the West jumped 8.8% during the short term, and Distressed homes, which includes "foreclosures and short sales which sell at deep discounts", were at 35% in January, up from 32% in December.

   A conversation on Housing would be incomplete without discussing inventory. According to the NAR, inventories continued to improve, and more specifically, total unsold listed inventory has trended down from a 2007 record, and is down a 20.6% below a year ago. (NRS) The report just released for the New Residential Sales, the HUD listed a supply of 5.6 months at the current sales rate.


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #HUD #NAR #singlefamilyhouses #Realtors #householdformation #mortgageinterestrates #homeprices #risingrents #residentialsales #inventories #existinghomesales

February 20, 2012

The Fed Pushes Rent To Own For REO Foreclosures

Hi Everyone,
   I hope you had a great President's Day, especially if you were fortunate enough to have the day off.

   In some previous posts here over the past few months, we have discussed the connection that is music to the ears of Real Estate Investors, which is using Rent to Own for the immense amount of homes that are on the balance sheets of the banks, which are called REOs (basically, Real Estate Owned by the banks). Initially, we discussed this in "Feds Finally Keen on Rent to Own Housing", and then in the post titled, "From A Sad Foreclosure To A Happy Home". This is such a promising topic for everyone, not just Real Estate Investors, that it's important to revisit it here today, with some details and info from Joe Mont in his story titled, "Need a Foreclosure Cure? Try Rent-To-Own", and which appeared on TheStreet website.

   First, some info for those unaware of Rent to Own

   In a Rent to Own Deal, a Seller rents out their home to a Potential Buyer (a Tenant-Buyer), with a set price at which they will sell the home for during or at the end of a specified period of time. There is also an Option Fee, or an option-to-buy fee, which can run 3-5% of the value of the home.

   In the article by Mont, Brett Furniss, president and owner of BDF Realty, a Charlotte, N.C.-based firm that specializes in rent-to-own properties, says that there has been steady interest in these arrangements for the past few years, and says that "sellers realize that they can't sell their house for market value, so they are willing to entertain rent-to-own tenants, whereas in the past they just wanted to get the property sold"

   There are benefits for both sides on these deals.

   For the buyer, they have a vested interest in a property that they would like to ultimately purchase, and the time period of the agreement allows them to check out the area, the schools, and to build up their credit and/or their down-payment before making the purchase.

   For the seller, the mortgage is getting paid, and thus, the bleeding stops. They also have people in the home that they hope will take care of it as if it were their own, as well as taking care of the utilities, taxes, and as Furniss adds, "the risk of vandalism".

   "Fed Chairman Ben Bernanke shared his views on ways to escape the nation's foreclosure crisis", writes Mont. "Among the ideas in that speech" to the National Association of Homebuilders, was the topic of "rent-to-own properties". Additionally, says the Fed, Rent-to-own provisions could help renters and owners. "Bernanke supports the idea that a share of these creditor-owned properties be offered as "rent-to-own" properties rather than linger on the open market", adds Mont.

   Will the banks take this advice from Bernanke?

   We will see, however, as Mont writes, "the concept of rent-to-own and lease-to-own housing may be gaining traction among individual buyers and sellers". However, it is important to also look at the risks and the precautions.

   One risk that is important to understand is that of a financial nature, For example, if the buyer was unable to purchase the home by the end of the lease, or, if the price of the home is higher than the agreed upon purchase price (i.e, the seller could have sold it for more). Another such risk is the option money, and how it is credited towards a purchase or if any or all of it is refundable if they don't, says Mont.

   Some more good tips revolve around potential scams. A recently growing scam involves sellers who "pocketed their money even though the house was well on its way to foreclosure", writes Mont, so it is imperative to confirm ownership of the home. As always, involve your attorney and have them review all terms of the agreement. To learn more about Rent to Own, please see the E-book, "Secrets of Rent to Own", by clicking this link.

   So, after that mouthful, do you think the Fed will continue to push the Rent to Own path? If not, what would the reason(s) be?


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #REO #foreclosure #RealEstateInvestor #bank #housing #optiontobuy #properties #tenant #mortgage #leasetoown

February 13, 2012

An Updated Kitchen Equals An Easier Home Sale

Good Morning/Afternoon/Evening (depending on where you are!),

   "Kitchens Sell Houses". I'm sure you have heard this many times. It is a timeless factor when talking about selling a home.

   The kitchen is "the heart of a home", and "the stomach is the way to the heart", and the kitchen is where we "spend much of our time and most of that is with our families", writes Carla Hill for the RealtyTimes in her aptly named article, "Kitchens Sell a House". Hill says that kitchens are "integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms".

   Due to the fact that a kitchen is the showpiece of the house and is seen every day by you and your guests, Hill says that kitchens play such an "important role in the buying and selling process", and that "buyers want homes with up-to-date kitchens".

   So if you need updates to your kitchen, where do you start?

   Kitchens are expensive and need a lot of time, as well as skills, to do the job right. With the "complicated array of flooring, tiling, cabinets, and counters", Hill says, "most buyers want a kitchen that is ready to use the day they move in".

   What to buyers want in a kitchen?

   Hill suggests that you do your homework, and to "Scope out the competition" via local open houses or MLS listings. Look at the wood on the cabinets. Is it dark? How about the counters? Are the appliances stainless steel? Are there any "add-ons like dishwashers, wine-coolers, and trash compactors"?

   There are an endless amount of changes you could potentially make, but Hill cautions not to "become overwhelmed". She adds that you might be able to make minor changes, such as a warm, neutral tome of paint, removing clutter, updating appliances. adding a lower-end or a faux granite counter. Hill also suggests that you might even "save a bundle by doing much of the work yourself."

   "The bottom line is a kitchen can sell a home", says Hill, and suggests that you do some research on what your kitchen needs to "make it competitive with area listings."

   Have you updated your kitchen? Did you research it first? What did your updates entail? Did it help you sell your home?


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #HomeSale #kitchen #kitchenremodel #updatedkitchen #sellinghome #homebuyer #cabinet #granitecounter #openhouse #MLSlisting

February 7, 2012

Options For The Underwater Homeowner

Good Afternoon, and Welcome Back, one and all!

   If you happened to catch my last post, "Strategic Default To Stop The Bleeding", we discussed the "taboo" topic of walking away from your Home Loan (and thus, your home). Of course, if you have some equity in your home, a Strategic Default would not make sense, therefore, the discussion was within the context of "Underwater Homeowners" (those homeowners that owe more on their Home Loan that the Home is actually worth).

   In a quasi-sequel to the above-mentioned post, I cannot stress just how major a decision it is to walk away from your home, and you (only you), would need to take a look at all of the factors (financially, legally, etc). What I will say is from some research done by Tara-Nicholle Nelson in her Inman.com story, "6 ways to save your underwater home", Nelson said that she noticed that "most upside-down homeowners don't really want to default on their mortgages". If that is the case, what alternatives do you have vs. walking away?

   At least 6 alternatives.

   Nelson laid out 6 alternatives, which include:
     * Get Rid of credit card balances and your debts.
     * Get a second job ("It won't last forever", says Nelson)
     * Start a side business/Monetize your spare time.
     * Rent out a room/rooms in your home.
     * Apply for loan modification and Government programs.
     * Short-sell your home with a local agent, attorney, etc.

   One other alternative is to keep your eyes and ears open. For example, there was a recent Bank of America special event that invited struggling BOA customers to meet in person with "home retention specialists", in a story from Leslie Berkman, titled, "Borrowers may meet with retention specialists". Some of the options for these customers were home loan modifications, among other alternatives.

   In summary, Nelson says that fortunately, your options for avoiding a foreclosure "are not so limited as they might seem at first glance". However, if you at that point of making this big decision, she highly suggests that you "consult with a reputable real estate broker, mortgage broker, local attorney and local tax professional -- at minimum".

   Are there any other alternatives that you can think of that were not included here. Please share it with your fellow readers.


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #StrategicDefault #HomeLoan #underwaterhome #loanmodification #BOA #avoidforeclosure #retentionspecialist #realeestatebroker #mortgagebroker

February 3, 2012

Strategic Default To Stop The Bleeding

Happy Friday,
   Hope it's been a great week for you.

   The thought of picking up and leaving your home behind, while still owing money on it, might seem like an extreme option, but for some, it might be their only option.

   An Arizona couple with an "underwater mortgage" was recently profiled in a story on Yahoo Finance ("What Happens When You Walk Away From Your Home?" by Chris Taylor). The couple's home was appraised at nearly $400,000, but with the market downturn, they were told they'd be "lucky to get $200,000 for it", so with their $260,000 loan, they were substantially under water. The couple was faced with a tough decision; make the payments on their new home plus the payments on this older one, or stop paying the mortgage on the older one.

   Strategic Default.

   "I constantly get the saddest e-mails from people saying, 'I've exhausted all my life savings, my retirement is gone, and now I have to default,'" said Jon Maddux, CEO of YouWalkAway.com, in a comment included in Taylors' article. As applied to these particular Arizona couple, they had to "wrestle with it", with the reasoning that they work so hard and so long to build strong credit, with an element of pride as a factor, as well. Ultimately, they looked at the numbers and realized that just cannot continue paying both loans.

   With some numbers Taylor provided from CoreLogic, almost 11 million homes are underwater, with 1.5 million of them already in the foreclosure process (as per RealtyTrac). These numbers are due to spike, with a far-reaching impact on housing prices and the market in general. What's an underwater homeowner to do?

   Taylor lists a few things to keep in mind, for example, "companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process", and that "It's not personal; it's business". As for penalties, your Credit Score will bear the brunt, and a few years will need to go by to start removing the bruises and the blemishes.

   What else should you keep in mind?

   Taylor suggests that a Strategic Default should be a "last resort", and you should consider refinancing, as well as government programs "designed to keep you in your home". Your location is key, since each State "has its own rules and regulations regarding foreclosures". You should also talk to a professional about the implications, including tax implications, before deciding.

   "Strategic default isn't a decision to be taken lightly, of course", Taylor says, and adds that it's not desirable, "but not the end of the world either".

   Has a Strategic Default been an option you have considered at some point?


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #Arizona #underwatermortgage #StrategicDefault #strongcredit #foreclosureprocess #housingprices #homeowner #bankruptcy #refinancing #governmentprograms