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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
Showing posts with label option to buy. Show all posts
Showing posts with label option to buy. Show all posts

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

July 14, 2011

Rent To Own In Hong Kong?

Morning Folks,

   I'd like to wish everyone a Happy Half Day. "Half Day", you ask? Yes, since I admit that I am a "hater of Summer", from June 1 - the end of August is 92 days. Half way is July 16th (Saturday)...thus, "Happy Half Day".

   In previous discussions, we spoke about the Global spread of "Rent to Own" as am option to buy or sell a home. Rent to Own is gaining further popularity in the USA, Canada, Australia, the Philippines, and multiple different countries. As we spoke about in our post titled, "It's Still Rent to Own to Me", we touched on the different names that are used when discussing Rent to Own (Lease Option, Option to Buy, etc), but they are all roughly equivalent to the same arrangement.

   Now, let's add Hong Kong to the mix. In a recent story by Bonnie Chen in The Standard in Hong Kong ("Greenbelt conversion on cards in drive to boost flats"), Chen discusses a recent initiative to develop more residential space across the country. Part of this initiative involves a list of potential sites that needs to be submitted, "to the chief executive's office by September", "according to a source."

   The interesting fact here, is that the Chief Executive Donald Tsang Yam-kuen, in a speech last year, announced the "My Home Purchase Plan" (also known as rent-to-own), with the, "first 5,000 units to be completed by the Housing Society in 2013. ". This is just one piece of Rent to Own in that part of the world. China is an incredibly huge market, and one that we look forward to becoming an integral part of in the upcoming months.

   Regarding Rent to Own in China and the China Housing Market, we will be taking a closer look at these in a Blog Post in the next few weeks, so keep an eye on our Blog.

What are your thoughts on China and Rent to Own?
Happy Half Day !!


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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: #renttoown #hongkong #china #australia #leaseoption

January 28, 2011

10 Things NOT To Do When Selling a Home

Good Morning,

   I'm glad we all made it through another week together, and Friday is here!

   Today, we're going to take a look at "NOTs", so basically, 10 things to "NOT" do when selling a home, as the title says.

Jacquie Cliff, a Real Estate Broker with Champions Real Estate Service, provides the following "Do NOTS":

#1 "Never hang around buyers while they are viewing your home."
#2 "Don't let your animals run free while buyers are going to be in the house"
#3 "Don't move someone into your vacant home without telling the listing agent"
#4 "Don't wait until the last week before the foreclosure auction to list your home for sale!
#5 "Don't list your home with the agent that says they can get more money for your home than anyone else"
 
James Whalen, a Sales Associate with Gloria Nilson Realtors, suggests to "NOT" do the following:

#6 Do NOT, "reach even "a little bit" higher than what your house is worth. Research, research, research to determine exactly what your home demands and then price accordingly...anything even slightly above market value will be branded overpriced and get stale in the market fast, forcing reductions below what you wanted in the first place"

Joanne Cleaver, a freelance writer, provides the next "NOT" for agents who are selling homes:

#7 Do NOT, "try to get the buy side and the sell side of the commission.", and from a particularly bad experience, she says, "They deny it" but, "They are so desperate for income"

Allen Murray of Logic Realty Group, provides our final 3 "NOTs":

#8 Do NOT Be emotional. As Murray says, "This is a business transaction. Do not get offended with suggested sale price by your agent and/or low ball offers from buyers. A good agent is looking out for your best interest in the end and buyers in this market are told to test the waters. If you get to emotional, you could miss out on selling your home in a timely fashion."

#9 Do NOT get greedy, says Murray, and that, "Depending on your area values have dropped as much as 50% over the last 5-6 years. If you are fortunate to have equity in your home and MUST sell, be fair and take what you can get"

#10 Do NOT have a closed mind. Murray says that, "This market can be challenging if you are closed to ALL the options available to you to help your selling situation. If you can not get a particular price for your home, consider a lease w/option to buy. Think about it, foreclosures are at an all-time high and families still need places to live." Murray provides an example: "If a family had an adjustable mortgage at 6% 1,200/month payment (never late) and then it adjusts to 8-10% and a $1,500/month payment, guess what? They are not dead-beats, they just cant afford a $1,500/month payment!!! Your payment maybe $1,000/month, so you have a potential of $200/month additional income."

Do you agree with these "NOTs"? Have we missed anything?

Has this NOT been confusing (sorry - I just couldn't avoid that one!)

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

TAGS: #foreclosureauction #optiontobuy #mortgage

January 12, 2011

Taking the Plunge - 3 Tips on Buying Your Rental Property

Hi Folks,

   Happy mid-week to everyone, and we ask that you arrive safely to wherever your destination is, should you need to commute in the Northeast today.

   You know, if you're renting a property, and the homeowner gave you an option to buy the property...well, how do you know when you are truly ready to buy the home? That is the question we are addressing today, along with 3 tips to help you along.

   "As a tenant with an option to own there are some fundamental principles you should consider before buying a property.", says Brian Rademacher of Re/Max Advantage Plus. First, make sure the property, "is a good fit for your lifestyle and family. Do you ultimately envision this property as your home?"

   Secondly, says Rademacher, "contact a real estate professional to review the option to purchase contract and perform a current market analysis. With declining real estate values in many markets the purchase price on the option contract may be higher then the current market value of the property.", and he suggests that if this is the case, that you should, "show the owner the current market analysis and discuss lowering the purchase price to meet the current market value.

   As a final tip, Rademacher suggests that you, "talk to a mortgage professional to determine if you are qualified to obtain a loan to purchase the property. Find out what your mortgage payment would be and if your mortgage commitment would fit into your monthly budget." As Greg Cook, a Mortgage Professional, says, "Owning a home costs more than renting. Most of the time an "all-in" mortgage payment (including taxes and insurance) will be more than the rent they might currently be paying. But that's only part of it. The tenant is now responsible for maintenance, repairs and all those other little expenses that come with homeownership." Cook also recommends to any tenant looking to , "make that jump" to find out from a, "first time home buyer specialist how much the mortgage payment would be on the home they are buying, add an additional $100-$200 each month and then take that difference between rent and homeownership expenses and put it in savings."

   "Having seen several option agreements over the years, ask yourself a 2 pronged question", says Thomas Redmond of Redmond Realty. "1st, What is important about staying in this property and the community at this time and 2nd, Are the terms in my option agreement favorable or extremely favorable when considering my local market as well as my ability to purchase elsewhere during the option period." Redmond says that if the answer is, "yes I want to stay here for a couple of years or longer but your option favors to the landlord, who likely prepared the option agreement, then renegotiate or let option expire."

   "As long as renting is not substantially cheaper than owning it would be worthwhile to become the owner and start reaping the tax benefits and building equity.", says Lenny Layland, Broker/Owner of Investorlando Realty. Layland says that the owner, "should be doing everything possible to help this happen (assuming they want the tenant to exercise the option). Credit counseling support, paying closing costs and rent credits are possible ways."

   In summary, Rademacher says that it's a good time to buy, "if the property is a good fit for your lifestyle, has a sound option to purchase contract, is priced at current market value, and meets your budget and mortgage qualifications." By analyzing these 3 items, Cook says that, "Not only will they now have an idea of what sacrifices or lifestyle changes will need to be made but they will have built up their savings which, from a lender perspective, is only a good thing.

   Redmond makes a very positive statement, in saying that you need to, "Remember you bring a lot to this transaction so do not discount your position with tenant mentality.  You can take charge help the seller to help you for the best possible outcome."

   We hope these tips have been helpful. Do you have anything to add to this list?

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: #optiontobuy #mortgage #rental

December 22, 2010

Holiday Wishes From HomeRun Homes

Hi Everyone,

   Hope your week is going smoothly. At this time, you may very well have visions of sugar plums dancing in your head, so I will make this short and sweet today !

   I just want to take this time to thank you for being a dedicated reader of my blog, and to say that I truly and genuinely appreciate the time you have spent reading my observations, views, (and sometimes even my rants!), and further, I hope that you've learned a thing or two along the way. As always, you can always contact me in order to suggest any topics or issues for me to investigate, review, and post in this blog. I am ready, willing, and able to accommodate you, as always.

   This will be our last post until Monday 12/27, so to our friends that celebrate Christmas, I wish you the Merriest Christmas ever, from our family and our company to you and your family. May the season bring you peace, serenity, and joy.

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

October 1, 2010

Steps to Acquiring a Loan

Hi Everyone,
   It's October...'nuff Said ! Since I am a Halloween baby, it's my birthday month (please don't ask my age!).

   Not Long ago, we were quoted in an article on the new "Currency" site from American Express, titled, "3 Steps to Getting a Loan", and the article could serve as useful to any of our readers that are interested in procuring a loan.

   The author, Christina Couch, summarizes the 3 steps as, "Stimulate Your Score", "Steady Your Finances", and "Readjust Your Debt Ratio".

Under the "Readjust Your Debt Ratio" step, Couch writes:
"...if you still can't get a traditional loan, you're not out of options. There are other financing opportunities to investigate, like renting with the option to buy. 'Deals like that typically last for 12 to 36 months and require tenants to pay a non-refundable option fee instead of a down payment—and usually, that fee is a lot cheaper,' says Robert Eisenstein, president of HomeRun Homes, a real-estate firm in Lake Ronkonkoma, New York.'There are a lot of creative ways to buy, and a lot of very specific mortgage programs out there, if you don't qualify for traditional loan products,' Eisenstein says. 'You just have to do a little homework.'"

   Head on over to the new American Express "Currency" Site to have a look around at some really great articles (as well as the one mentioned above).

   Next Week (Monday 10/4), the Pending Home Sales Index will be released. These are key figures, so let's monitor them together.

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

September 10, 2010

Florida Snowbirds and Florida Real Estate

Hi All,

   Hard to believe that it is Friday, but that's what happens when you have the "short week". Fall is in the air, and somewhere out there, there is a huge pumpkin with my name on it!

   I wanted to share a great new article in which we have had a nice write-up, and it is titled, "FLORIDA REAL ESTATE: Numbers are right for snowbird buyers", written by Janet Groene for Forever Young News (a "50-Plus" lifestyle magazine).

   The excerpt that mentions us is as follows:

"If you don’t yet own a winter place and want to try several before you buy, look into a rent-to-own situation. An international group, Lease2Buy.com, puts prospective buyers in homes that are for sale, then gives them the option to buy after an agreed period. Robert Eisenstein of HomeRun Homes in Lake Ronkonkoma, NY can work with northerners who want a rent-to-own winter home situation in the sunbelt.", and, "He observes, “Central Florida has been beaten down and is prime for a comeback. The Miami-Dade market seems fickle to us but we are seeing tons of requests so there is definitely some play there as well.”
   We are always glad to give our opinion on different markets across the country, since our website stats tell us where the homes and/or the buyers are, where prices are trending, and more.

   By the way...have YOU placed your Home on our website yet (VISIT THIS LINK TO DO IT NOW) ? Have YOU placed your Request for a Home on our website yet (VISIT THIS LINK TO DO IT NOW) ?

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

August 30, 2010

10 Million New Renters?

Good Morning,


   We hope everyone had a great weekend. We certainly hit a homerun (no pun intended) here on the East Coast with golden sunshine, deep blue skies, and low humidity all weekend long. Ahhh...allergies !!

   When looking over some stories on a Google search the other day, I came across a story titled, "Renter Nation", in which the author says that, "The recession and shifting demographics will swell the ranks of people who will rent, not buy, housing over the next five years", and he deduces that, "roughly 10 million extra folks could be moving into rentals over the next five years". While this could be a frightening prospect for those who are thinking about selling their homes within the next 5 years, this does still hold optimism for some segments of the market.

   Those who are looking to sell their home would not have to stretch far across the table to rent their home with an option to buy, or Rent to Own. More often than not, those looking for a rental home will jump at the opportunity to earn some equity while they are renting. In this respect, these numbers hold promise. For Realtors, they will still earn the rental fee. For those who are renting out homes in the first place, they could see a surge in demand, which might potentially drive up some rental prices in certain areas.

   What would be the "Butterfly Effect" of such increases in rental prices? Good Economic sense tells us what should happen, but things have been so very far off from common sense over the past few years, that I would not even venture a guess. We welcome your opinions and comments on this question.

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