Crucial Parts of a Rent to Own Deal

Hi Folks,
   Thanksgiving week is upon us as quickly as I think I've ever experienced it before. Does anyone else feel the same way?

   "Rent to Own Homes" are an excellent vehicle for both buyers and sellers, however, some folks throw around those 4 words in a haphazard manner with no thought behind it. When that happens, it opens the door to bad things, and some bad folks trying to profit on the backs of innocent people.

   With our 10-year anniversary celebration ongoing, by now, you should be fully convinced that we take the phrase, "Rent to Own Homes", quite seriously, and we cannot stress enough just how important it is to sort out  all of the facts and responsibilities of all parties, just as in any other business contract.

   There are certain things that the Seller/Homeowner must do, as well as certain things that the Prospective Tenant/Buyer must do, but most importantly, these things must be coordinated between both of the parties. Ignoring these things are the sure sign of legal repercussions down the road, for both parties.

   In an aptly-named article, "Questions to consider if looking to rent-to-own", Joanna Jackson, a sales manager/associate broker with Jackson Realty, wrote up a concise breakdown of these specific items.

   Basically, as you might imagine, these run the gammut between Who fixes the toilet bowl, who pays for the handyman, if needed, and plenty of "What If?" scenarios.

   Jackson list the following items the seller will need to consider; Who will tend to the property, pay for routine maintenance, and pay for major repairs? Will you be managing the property, and if not, will you hire a real estate agent (and what are the costs of those two routes)? How much does it cost to set up and manage an escrow account for the portion of rent allotted to the down payment? What if the renters bail on you? Who keeps the money in the escrow account? If the buyers change their minds, what will be required to put the property back on the market for sale?

   Jackson also lists some of the items that need to be thought out by the buyers; How much, if any, of the rent is going to the down payment? What if you change your mind (How locked in are you if you change your mind?), What will it cost you to get out of the deal, if needed?, How long will it take to accumulate enough of a down payment to help you towards qualifying for a mortgage?, Who is responsible for paying the property taxes (and other local taxes) and insurance on the property?

   These are all very open-ended questions with no Right or Wrong answer, however, there are certain local "traditions" or procedures that vary from state to state and sometimes even county to county. I fully concur with Jackson, who states that when "considering a rent-to-own deal, seek legal advice from a real estate attorney". I go one step further and suggest an attorney that is local to the property, and thus, the local laws.

   Although these above-mentioned items can seem a thorn in your side, remember one thing; these are what make a Rent to Own Deal an actual "Rent to Own Deal", vs. a shady open-ended agreement with many gray areas, which can stop you from selling your home, or, can stop you from obtaining your dream home. Nail it down the first time so everyone walks away happy!

   Have you had any good or bad experiences with a Rent to Own deal? We'd love to hear which of these suggestions came into play during the process.

   From your team at HomeRun Homes, we wish you a safe and enjoyable Thanksgiving Holiday!

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Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes - Rent to Own Homes, since 2002
"Located at the Corner of Technology and Real Estate"
Rent to Own Homes and Real Estate Blog for HomeRun Homes: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com


TAGS: #RenttoOwn #Homes #buyer #seller #contract #homeowner #tenant #property #maintenance #repairs #escrow #rent #sale #downpayment #qualify #mortgage #propertytax #realestate #attorney

Tips and Resources For Hiring Contractors

Hi Folks,

   Hope you're having an awesome week !

   If you have ever hired a contractor, you know that it can be quite time-consuming and sometimes quite difficult to find the right person. Today, we will be discussing some tips for hiring a contractor, as well as some resources to find contractors to hire.

   Debra M. Cohen of Home Remedies of NY, Inc. says that you should ask for the names and phone numbers of three to five customers for whom the contractor has completed a similar project in the past two years, as "This will make it more difficult for a contractor to “hand pick” only his best references. Call each reference and ask the homeowner what they liked and didn’t like about the contractor. Ask him if the final cost of the job exceeded his estimate and if he completed the work in a neat and timely fashion. Most importantly, ask them if they would hire the contractor again for another home improvement project."

   Cohen suggests that you contact your county offices to, "research what credentials are required for home improvement contractors in your state and in your county.", as well as ensuring that the contractor has a minimum of $1 million in general liability insurance. Cohen reminds us to, "get a copy of his license and insurance for your records." Allen K. Bahn, President of American Consulting Services, Inc., similarly states that you should, "First check the requirements of the state and local authorities and these include training, Bonding, Workmens Insurance, (and) General liability". Bahn says that many people have been, "duped by unreliable contractors giving them bogus papers. Yes these contractors can and are prosecuted but that does not solve your problems.", and says that, "in fact you have a full and total liability for all the actions undertaken by your contractor and subs."

   Jody Costello, creator of ContractorsFromHell.com, say that it is important for you to, "Conduct background checks that include uncovering relevant lawsuits, any small claims court filings, mechanics lien history, credit standing with suppliers and licensing history if required by your state." Costello also says that you need to conduct a thorough interview, "asking key questions around customer care, problem solving, safety issues, working with city inspectors, knowledge of code compliance, who will supervise your project and how much time they’ll spend, and how they handle unexpected surprises."

   Cohen also points to that fact that it is important to see how your personalities mix, since, as she questions, "Are you the type of person who likes to be involved in every decision or do you prefer to “leave your job to the experts”?". Cohen says that your contractor’s personality can make or break the success of your project.", as there are some contractors that, "prefer not to be micromanaged and others who want the homeowner’s input on every aspect of the job."

   When it comes time for an agreement, make sure that you get it in writing, says Cohen. "If your contractor is hesitant to put the details of your job in writing, I would be concerned.", says Cohen. She also suggests that you ask the contractor to, "document details about the type of materials he plans to use, his anticipated start date, project schedule and completion date." Bahn also suggests an, "exit clause for you.", so you can be in charge and protect yourself. Costello says that you need it in writing that, "you require Lien Releases at the time of each payment (in writing as part of the contract) from all subs/suppliers for work performed and material supplied to date." She also suggests having the following in writing: thoroughly written specifications sheet, start and stop dates, hours of working time on your project, days- Monday through Friday, hours such as 7am – 3:30pm.

   Cohen says that most contractors, "will request a down payment ranging from 10-30%. The remaining balance will be paid in increments in stages throughout the remodel and a 10% balance should be held until the final details of the project are completed to your satisfaction."

   Additionally, Bahn advises that, "the inspectors come when only when you are there. Many an city inspectors take bribes overlook violations. Even if they are punished ,you as the owner are liable for the problem."

   Now that you have been armed with how to weed out and find the right contractor for your project, where can you find them?

   Costello refers to hiring the right home renovation contractor as an “inside job”, and one that requires, "thoughtful research on the part of the homeowner. Doing the “behind the scenes” work before you even think about finding a contractor is key to a successful remodeling project and a positive working relationship with your contractor."

   Cohen suggests using a referral from a local "Homeowner Referral Network (HRN) business", since they refer a. "full stable of contractors from painters, plumbers and electricians to General Contractors, moving companies and architects. HRN's verify each contractor's license and insurance based on state and county requirements, check contractor references, work only with well-established contractors, and follow through every referral until project completion. Referrals are provided free of charge to local homeowners and contractors can't pay a fee to be listed or referred. There are currently more than 300 HRN's operating nationwide." She also says that, "When looking for a contractor, many homeowners ask their friends and family for recommendations but in my experience, getting a contractor referral from another trades person is far more reliable."

   Costello says that, "The fact is that home improvement has consistently ranked at the top for consumer dissatisfaction and fraud according to various consumer agencies. With little accountability on the part of the home improvement industry, it becomes the homeowners’ responsibility to get educated and informed so they don’t become a victim of an unscrupulous contractor."

   Hopefully, these have been some helpful tips for you. A great place to find a contractor is in our Home Services section, and you can offer your Home Services there as well.

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

TAGS: #contractor #HRM

Home Insurance For the Dangers of Short-Term Home Rentals

Hi Folks,


   How is your first week of the New Year, so far? It's going well, I hope !

   I was recently interviewed for a very interesting story on short-term home rentals, with the angle of the story on some dangers and issues that can arise from these arrangements. The story, titled, "Dangers of short-term home rentals", was written by Marcie Geffner for Insurance.com, and thus, the angle also focuses on Home Insurance to help mitigate these "dangers".

   Listed below are the points/comments that I contributed for this particular story:

"Some losses are accidental. Others are deliberate and potentially more difficult for homeowners to protect against, notes Robert Eisenstein, founder and CEO of HomeRun Homes, which operates a rent-to-own property website at Lease2Buy.com."

"You want to make sure you don't have any non-owner-occupied clauses or anything that states (the policy is void) over 14 days where it's not owner-occupied, for example," Eisenstein says.

Consider an umbrella policy. Liability should be a concern as well as theft or property damage, Eisenstein adds. An umbrella policy can offer additional coverage for medical expenses if a renter or a renter's guest trips and falls or suffers another type of injury on the property. "It's definitely a concern," he says.

   For the readers of our Blog, Geffner's story is an excellent piece that touches upon some very important concerns that need to be addressed when working on a Rental deal or on a Rent to Own deal. To read the full story, you can check out Geffner's article Here.

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


Tags: #insurance #renttoown

Rent vs. Buy, Rent to Own, and Eight-Years Strong...

Good Morning Everyone,

It's Wednesday, and we are half-way there !

Quite often, when a prospective buyer or a seller is evaluating whether they should Rent, Buy, or Rent to Own, they need to gather all of the applicable numbers and "crunch" them. If they start out by looking into Renting, they need to tally up the monthly payments, fees, insurance, and any applicable rate increases.

Likewise, for the possibility of buying a home, they have to take into account pricing, down payment, loan amount, interest rate, term, insurance, taxes, maintenance, and potential appreciation. On top of all of this, they need to figure it out over multiple different lengths of time, tax brackets, tax implications, as well as inflation rates. It can be daunting. There is quite a handy little tool over at Trulia, called the "Rent vs. Buy" Calculator, and this free automated program spits out some pretty helpful results. Head on over there and take a look at it today !

Now, based on the results that you come up with, you might lean towards renting a home (or renting out your home), buying a home (or selling your home), or you might chose the hybrid, which is Rent to Own. Whatever you decide, this tool will save you time and help you make your decision.

Since we are on the topic of Rent to Own, and receiving help in the decision-making process, be sure to check out this great article, titled, "Making Rent-to-Own Real Estate Deals Work", by Susan Kuchinskas at FamilyGoesStrong.com. This was a multi-part series of articles on Rent to Own & Lease Options, and this last article discusses some good tips and information.

We were honored to be included in this article as a long-standing resource for Rent to Own Home Listings (They referred to us as , "an eight-year-old online marketplace for rent-to-own deals"). This is an accolade that we are very proud of. We have been around for a long time, and we plan on being around as long as people need a roof over their heads !

Have a Great Week, and Happy Rent-to-Owning !