Guidelines For Earnest Money and Down Payments, Part 1 of 2

Hi Folks,

   Happy Monday to you, and a Happy President's Day, as well !

   We are starting a 2-part series covering some basic guidelines on both Earnest Money for Real Estate Deals, as well as Down Payment Money for purchasing a home. For today's installment, we will be examining Earnest Money, what it is, and what the right amount should be based upon.

   As Earnest Money is described on About.com, "It's a good faith deposit but not to be confused with a down payment. When buyers execute a purchase contract, the contract specifies how much money the buyer is initially putting up to secure the contract, to show "good faith," and how much money all together will be deposited as a down payment. The balance is generally financed as a mortgage or a combination of mortgages. An earnest money deposit says to the seller: "Yes, I am serious enough about buying your house that I'm willing to put my money where my mouth is."

   "After 12 years in the Real Estate industry my advice in this economy is this", says Adam Cowgill, A Sales Associate/Realtor; "you should still offer a deposit that is the maximum amount of money you are able to offer in exchange for asking the seller to remove their home from the market while you satisfy your contingencies". Marc Bulandr of Foreclosure and Short Sale Experts Reoassets, Inc., says that, if a buyer wishes to purchase a property, "the more the earnest money, the more favorable the offer will be viewed by the seller."

   Jeff Tufford, a Mortgage Consultant, says that Earnest Money should be, "market driven", and that in his market in Mid-Michigan, "the going amount is typically $500-1000", and the average home price, he says, is $75,000 to $100,000. Joetta Talford, a Realtor with Keller Williams Realty in Fort Mill, South Carolina, agrees that the amount of Earnest Money, depends on the market and the demand for the property". Talford says that typically, "most buyers purchasing a property for $100k or less can offer $500 in earnest monies", and "anything over $100-150k, the buyer should probably offer at least $1,000". Further, Talford says that, "If it is over $200k, the buyer can expect the seller to ask for 1% of the purchase price during negotiations on a resale. If it is a bank owned, HUD or VA property, expect to pay $1000 to 1% in earnest monies no matter what the price." The maximum amount, Talford says, "depends on the bank or government program and what their specific guidelines are.", and says, "HUD and VA have the guidelines for each of their programs on line. Banks do not and each bank is different."

   Kelsey Lane of The Look Team Realtors in Silicon Valley, says that in their area, "the standard earnest money or good faith deposit is 3%. Almost all contracts we write has this amount.", however, Lanes says that, "the exception to this" was as little as $1000 earnest money., and says that, "It was in 2006. On properties that have been on the market for awhile, or in lower income areas, we see a lower percentage. However, in the in-demand areas, we still have multiple offers and if a buyer doesn't have 3% for their deposit, they aren't considered to be competitive or serious."

   Patrick E. Hudson, a Commercial Real Estate Attorney in Texas, says that, "The guideline on earnest money that I constantly see is 1% of the total purchase price. I see 1% in so many contracts that it must be the norm in our residential market." Interestingly, Hudson also mentions, "option periods" or "free look periods", where he says that the buyer, "can walk the deal and be refunded their full earnest money are typically $10 a day (usually, a 10 day option period for $100)." That sounds like a great option for anyone truly looking for the try-then-buy factor. "I've been a broker focused solely on the sale of foreclosure and short sale properties", says Bulandr, who says that the Earnest Money guidelines are, "fairly rigid on cash offers for foreclosure properties. It's generally 10% (or higher) of the purchase price."

   As for the Earnest Money physical funds, Bulandr says that, "If a contract is being properly represented by the buyer's attorney, earnest money will be protected.", and that, "In most states, earnest money is held in a trust account that can only be released after agreement is reached by both parties. Thus, if in a non-financing situation, I would suggest as much earnest money as down payment, with a minimum of 10%." He says that, "Again, depending on the state, you can stipulate that Earnest Money can be held in an interest bearing account if its a significant amount. As for financed situations, he suggests, "less than $1,000, but frankly, depositing Earnest Money up to the amount of the down payment is suggested."

   As you can see, there are many determining factors for Earnest Money. In part 2, we will be discussing some basic guidelines and rules for down payments. Thoughts? Questions?

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

TAGS: #earnestmoney #realestate #foreclosure #shortsales

New Residential Construction Breakdown And Analysis

Hi Folks,
   Happy Friday, and glad to be with you today.

   Earlier this week, the New Residential Construction numbers for January 2011 were released, and since these numbers are quite important, we're going to review them today, along with some expert commentary.

   The New Residential Construction numbers are composed of Building Permits, Housing Starts, and Housing Completions. Both Building Permits and Housing Completions were down for both the December 2010 - January 2011 period, as well as the January 2010 - January 2011 period. Privately-Owned Housing Starts, however, were up during the December 2010 - January 2011 period, but down for the January 2010 - January 2011 period.

   Kirk Nace, an active investor since 1981 who has owned hundreds of units, says that, "Like many other Real Estate reports, a monthly snap shot can be greatly misrepresentative of the real underlying situation". Additionally, Nace says that the "December #'s were partially due to builders beating the new codes by submitting applications early".

   David Rice of New Home Star Corp, says that, "While January numbers did come in below what we all may have hoped, it was by a small margin. Given the inclement weather throughout much of the Country, we may feel better about the numbers. I know that, in some of our divisions, builder offices were closed for two or three days. If someone closed a manufacturing plant for two or three days, you wouldn’t be surprised if production was down for the month by 10%, would you?"

   Additionally, Nace says that he has, "spent decades working with the top professionals around the country in and related to the real estate fields", and says that, "from what we see on the streets, we are still several years away from a market bottom. The inconsistencies being reported to Mr/s Average Joe Homebuyer has created more fear and confusion than anything. This fear has led to wide spread paralysis of these potential buyers." In closing, Nace says that, "We don’t see the situation changing until there exists a perceived level of stability and certainty."

   Well, on that sobering note, we have come along way. What are your thoughts on this?

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

Is Now The Right Time To Buy A Second Home?

Hi Folks,
   Today, we have a special guest post from Matthew Read, a home insurance specialist, who will be discussing the topic that a lucky few of us get to ponder; "Is Now The Right Time To Buy A Second Home?"

***
It might sound crazy to invest money in a second property at the moment, given the instability of the economy, but there are a few positive reasons to do so:

First:
Home prices in many areas of the country are low...very low! According to Zillow.com, the average home price in the U.S. has fallen by around $65,000, as the average price went from $240,000 down to $175,000 since 2006. Although home prices might continue to fall, they are currently at a very appealing level, and so now might be the time to invest in a second home before prices start to rise again.

Second:
Interest rates are very low, meaning that, if you can get a mortgage, now is the time to do so. For those who already own a home, the mortgage rates on a second home would be incredibly appealing at the current time.

Third:
A second home can be a great money earner. Although you might have to spend money on fees, maintenance and second home insurance etc, you could rent out the home or do a rent to buy option, covering the mortgage and making some money on top. With a strong renters market at the moment, this could be a nice little earner for you.

Finally:
It’s better than saving! Interest rates on savings are quite low at the moment, and so you may benefit more in the long run by investing your savings in property than in the bank. Normally it would be the other way around, but with the banking issues at the moment, your money may actually be safer in property investment than bank investment.

Obviously before pursuing anything like this you should talk to the real estate experts, but it is definitely something worth thinking about if you have the spare capital or equity available.

***

Thanks Matthew - hopefully, this info will prove extremely helpful to our readers.

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

Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

Chance Encounters - A Valentine's Day Special

Hi Folks,

   Hope you all had a great weekend, and I wish you a very Happy Valentine's Day/Love Day !

   In the spirit of the Holiday, I'd like to talk about chance encounters in life, for example, the people we meet in life, whether it be a potential love interest, a potential business partner, or even a potential friend. We never truly know when we will meet someone that will truly bowl us over and fit one of these categories perfectly.

   Oftentimes, we could be out in a store, in a mall, in an airport, and basically anywhere you go, it could happen. There are many studies that show that the chemistry between two people meeting for the first time can quite often determine the path they will take together (please don't ask which studies - I think we have all heard about these studies).

   It is these chance encounters that make life worth living, and adds a little bit of flavor to our everyday lives. My personal theory is that life is never boring, and it is due to this potential for chance encounters along all three categories that I mentioned above. When you meet someone that falls into one of those categories, you just know...you know if the physical chemistry is there for a new love interest, that the trust and confidence exists for you to feel confident in pursuing a business venture with someone, or just basically someone you genuinely like and feel could be a great friend.

   Chance encounters...Life defined !

   Have a Wonderful day, and be sure to tell those that matter the most exactly how you feel about them !

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

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

What Are The Hottest Real Estate Internet Trends?

Hi Everyone,
   Glad you could make it back with us today.

   Today, I'd like to discuss some of the hottest Real Estate trends on the Internet. Some of them will be familiar to you, and some of them will be new ones that will surely become a part of the mainstream for Real Estate on the Web.

   The first "trend", if we can even call it that, since it has become super-mainstream, is Social Media, such as Facebook, Twitter, YouTube, etc. Earl Miller of 5Star Investment Group, feels, "that the hottest Internet real estate trends are social media", and says that, "Studies have shown that 90% of all buyers that are looking for a home will start their search on the Internet.", and that, "The old way of doing showings on properties with a Realtor are really fast becoming outdated. People want to see more of the property in a smaller amount of time before they actually drive out to see it." One of the many services that capitalizes on the soaring popularity of Social Media is "Tweetlister.com", which, "takes MLS listings and turns them into tweets, then allows agents/brokers to schedule them to tweet to selected Twitter account", as explained to us by Lloyd Chrein, an individual that is familiar with the service. There are numerous other utilities and services that piggy-back on Social Media, but that would encompass an entire Blog post by itself.

   Another hot trend is the Housing Search experience on the Internet. Paul Gleger, Director of Communications Office for HotPads.com, says that he is seeing a, "Particular emphasis on creating a granular and personalized housing search experience.", which he says is being done through, "interactive map technologies, neighborhood search filters, integrating the social graph into the search process, and there is an especially strong growth in mobile tools." Along the same theme, Sam Debord, a Managing Broker/Realtor with Coldwell Banker Danforth, says that one of the biggest Internet trends in Real Estate are, "tying in localized services to MLS listings.", and that, "Every web site has home listings with photos, but the more advanced real estate sites have a suite of features from multiple vendors/providers all on one page." Debord says that, "Users shouldn't have to click around to find these features, they're all on one page.", and he gives examples such as map search, area maps, Google street view, walk score, census data, school data, and pricing history. As Debord says, "Many different data sources, but no need to search around."

   Video Tutorials are also becoming increasingly more popular, and as Christine Schwalm, an Interior Designer that specializes in home staging for Realtors says, the videos she creates are, "Nothing fancy." Schwalm says that she shoots it, "with a flip camera and don't do much to edit the footage." She informs us that she does, "A one take video that lasts several minutes that follows the realtor around the space as he/she explains the property. Home buyers know that it is fairly easy to manipulate pictures, so the videos do a more accurate job of selling the property--and featuring the realtor."

   The final trend leans more toward the lending side of the industry, and Dave Galanter, President of freeMortgageFix.com calls it, "DIY Mortgage Modification". Galanter says this is a free online utility to assist homeowners in, "preparing a Mortgage Modification Application which complies with HAMP guidelines as well as individual lender's own programs. It works in a way that is very similar to Turbo Tax, with helpful hints and prompts.", and says that he is, "quite sure it is the best assistance for the DIY Mortgage Modification Applicant on the web."

   There are some exciting trends on the Internet for those of us in the Real Estate industry. I hope these have been helpful. I'm sure we missed a few and we'd love to hear about them from you.

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


TAGS: #realestate #socialmedia

HomeRun Homes And U.S. Legal Forms Announce A Strategic Alliance

Hello Again,


   This is just a quick note to announce some great news:

"HomeRun Homes And U.S. Legal Forms Announce A Strategic Alliance"

For the full details of this new partnership with "America's One Stop Shop for legal forms & documents", the full Press Release is featured below:

*******************************************************

For Immediate Release:

Robert Eisenstein
HomeRun Homes
(631) 676-3609
(631) 574-2420
http://www.Lease2Buy.com

HomeRun Homes And U.S. Legal Forms Announce A Strategic Alliance

Ronkonkoma, New York, February 7, 2011 - HomeRun Homes (www.Lease2Buy.com), the long-standing marketplace for Rent to Own Homes, has formed a strategic alliance with the legal forms and documents mega site, U.S. Legal Forms (www.USLegalForms.com)

A Partnership Based on Necessity - Legal Forms For Rent to Own Deals.

U.S. Legal Forms, which is referred to as "America's One Stop Shop for legal forms & documents", has been in business since 1997, and carries over 36,000 state-specific legal forms. Robert Eisenstein, the CEO & Founder of HomeRun Homes, points to the fact that visitors to HomeRun Homes, "are here to find or sell a Rent to Own Home, and they need the proper forms to complete these deals.", and, "since U.S. Legal Forms has been rated '#1 Legal Forms Product' 6 straight years 2006-2011, we evaluated them and thought it would be a great fit for our customers."

Eisenstein says that as a result of this joint venture, visitors can now browse and select the forms that they need via a link on the home page of his website, as well as in the Log In User Control Panel, which is provided to those placing Ads on HomeRun Homes. Some of the forms that would be of particular interest to those working on a Rent to Own deal would be the Landlord Tenant Forms, Deed Forms, Home Sales Forms, Owner Finance Agreement, Purchase Contracts, as well as many others that are offered by U.S. Legal Forms.

HomeRun Homes is working towards a very productive and helpful year for it's visitors and customers, and Eisenstein is hoping that this year is even busier than 2010. Last year, the company celebrated their 8th anniversary, launched a website for foreclosure assistance via Rent to Own, and spent a large amount of time and budget in complying with the new Government Standards for Web Security Compliance, referred to as PCI/DSS.

For additional information on the topic, "HomeRun Homes And U.S. Legal Forms Announce A Strategic Alliance", please visit http://www.Lease2Buy.com

ABOUT HOMERUN HOMES

Founded in 2002, HomeRun Homes is a Centralized Marketplace which helps people Buy or Sell a Rent to Own Home, a Commercial Property, or to offer Home Services nationwide and globally to the thriving Rent to Own market

- END -
*******************************************************

Thanks again, and have a great week !

Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #renttoown #landlord #ownerfinance

How Much is Too Much Government Involvement With Home Owners?

Hi Everyone,

   Hope you had a nice and relaxing weekend.

   Ever since the economic crisis exploded on the scene, there has been much debate on the topic of the Government's involvement in our every day lives, from the big bank bailouts on Wall Street, on down to homeowner bailouts/modifications on Main Street. How much is too much?

   We put out this question, and we received the strongest response from Pablo Solomon, who resides in Texas. "I grew up in Houston.", says Solomon, where, "The city had codes for every board and wire, and yet would let developers build entire neighborhoods in a flood plain. The same was true for the Gulf Coast. You had to have every detail permitted while allowing you to build on a sandy barrier island that was certain to wash away with the first hurricane. How crazy is that?".

   Solomon also provided his comments on the tax credits for homeowners and the bailout of homeowners, and he says that, "'social justice through redistribution of the wealth' has created more problems than it has solved.", and as far as bailing out homeowners, he says, "what is good--or bad--for the Wall Street Goose should apply to the local homeowner Ganders.", and Solomon says that he is, "amazed that many who see evil in bailing out mismanaged businesses, see good in bailing out mismanaged households."

   Solomon also sees the housing bubble as much due to, "Main Street people taking advantage of the easy loan situation as were Wall Street crooks.", and says that, "There are dirty hands at every level."

   In some final comments, Solomon, an artist known primarily for drawings and sculptures of dancers, muses, "Can socialized housing be far behind?". He questions the following; "Why should taxes payers have to borrow money from the Chinese to rescue either businesses or home owners who made stupid decisions. Even if sad situations result from sad circumstances--that happens. Nature has no bailouts and yet things eventually level out."

   Obviously, these opinions are those expressed by Mr. Solomon, however, I'm sure there are some opposing opinions. Do you care to share with us?

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


TAGS: #bailout #modification #taxcredit #housing

Finding Lease Options for a House

Hi Everyone,
  
   Yes, it is Saturday, and this is a quick check in to let you know about an article we were mentioned in on EHow.com, for a story titled, "How to Find Lease Options for a House", written by Ray Cole.

   The excerpt that we are mentioned in is the following:
"Visit websites such as Rental Houses or HomeRun Homes to find lease options for a house"
(As you know, HomeRun Homes is http://www.Lease2Buy.com)

   It's always great to be mentioned on such a well-respected website such as EHow, and I am flattered and very grateful for this surprise inclusion !

Enjoy your weekend !
HomeRun Homes Blog http://blogging.lease2buy.com

HomeRun Homes Website http://www.lease2buy.com
 
 

Real Estate Market Forecast For 2011

Hi Folks,

   Happy Friday. How was your week? Did you meet all of your goals?

   The question for today is: "Where Do You See The Real Estate Market Headed in 2011 ?" In order for us to gain the proper perspective, we spoke with professionals from 3 pieces of the Real Estate "Pie": A Real Estate Advisor, A Real Estate Investor, and A Real Estate Attorney.

   The Real Estate Advisor that we spoke with is John Rymer, of Rymer Strategies in Tampa. Rymer discusses the continuous, "downward pressure in the form of added supply from foreclosures and banks finally disposing of long-distressed condominiums in many sunbelt locations", as well as the, "tightening of credit standards" from the, "GSE's (Freddie and Fannie) and overly zealous overlays from the major mortgage banks that have made mortgage approval the most difficult in generations."

   Rymer tells us that, "As any renter will tell you, patience has been well rewarded in this downturn and strategic buyers who jumped in during 2008 - 2009 have been penalized are now gun shy about putting more money, or recommending to other to put money into real estate.". In addition, Rymer reminds us that the, "affordability of homeownership is at a 50 year record.", and warns that, "Sooner or later greed always overcomes fear". "Will 2011 be the year that we see a significant uptick in housing?", questions Rymer, rhetorically, "and replies, "Perhaps not until late in the year, but headlines seem to focus on the negative, so look for any good news to be buried on page 6."

   For the perspective from a Real Estate Investor, we spoke with Marc Sherby, the "Sheriff Sale Guru", who believes that foreclosures will continue to be one of the, "hottest segments of the market in 2011, in spite of the robo-signing incident." Sherby has seen a drop-off in foreclosures at the end of Q4 in 2010 due to banks, "checking and rechecking their paperwork.", but says that, "as the lenders get their paperwork houses in order and as the continued sales are carried out, and as new properties are coming up for sale there will most likely be a deluge of housing on the market. That is why I see the market headed to another record year in foreclosures, as do most experts."

   Sherby says that for those who are educated in purchasing foreclosures, "the buys will be extremely good to great as banks chop prices even further to move product from their non-performing assets inventory.", and says that while retail prices are still dropping in some markets, some others are stabilizing.

   Troy Doucet a Real Estate Attorney, provides our Real Estate Attorney perspective, and says that he sees the Real Estate market, "continuing to stagnate this year into next.", and states that, "as the pressure of debt continues to grow on state and local governments, we will begin to see interest rates rise. As interest rates rise in the bond markets, rates will rise for homebuyers, meaning buying a home will become more expensive and will discourage buyers." Just as our other commentators have said in this article, Doucet also points to the number of foreclosures and the, "lender's shadow inventories of homes" as major contributors to the, "market's stagnation."

   How about your point of view? What do you think about the 2011 Real Estate Market? We'd love to hear your comments.

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: #realestate #foreclosure # shortsale
 
 

How Do you Handle Tenants?

Hi Folks,

   Hope you're having a great week. If you're getting hit by this huge ice storm, please drive carefully today !

   A great deal of any business in the Real Estate industry deals with tenants. Today, we're going to take a look at some tips for handling and managing tenants; easy tenants and difficult tenants.

   Let's start out with a personal favorite, the "Easy Tenant". According to Jacob J. Gabrie, a Commercial Shopping Center Manager and a Broker and CEO of Town Center Realty Group in California, "They deserve lots of respect", since, "these are those that I don't have to constantly contact to remind to pay rent, they don't complain and really are the reason why a job like mine is as fantastic as it is". As Beth VanStory says, "With good tenants, I think the most important thing to do is be responsive and address issues promptly"

   Now, for the flip side, the "Difficult Tenant". Gabrie says that he deals with this group firmly and "head on", and says that they lie regarding when the rent is coming, about providing a certificate of insurance, etc. Basically, as he describes it, "You give them an inch they take a mile- but that is the nature of these type of group."

   VanStory tells us that she recently had a, "very challenging experience and learned two valuable lessons". The first lesson is to "Always thoroughly screen your applicants.", for example, as she says, "insist on speaking with previous landlords or property managers.", "Insist on a credit report.", and "If the law in your state allows, ask to see a bank statement.". VanStory points to her bad experience, where she failed to do this as she was in a rush, and says, "If I had done a thorough check I would have found out that my tenant had grossly misrepresented himself. I would not have rented to him had I done a thorough background check."

   The second lesson mentioned by VanStory is to, "Use the law", and at the sign of the first problem, "begin to engage in every legal process available to you.", and, "Make sure you thoroughly understand the law." She said that with her bad experience, since she, "wanted to "get off on the right foot" and "be a nice landlord."", it cost her money.

   VanStory says that, "It's not about being nice, it's about protecting your asset and it's a business. If the rent is late by whatever grace period you define (ours is days), immediately issue a "Pay or quit" and start all the legal documentation you will possibly need should you have to move to eviction." Similarly, Gabrie says that he maintains, "experienced collection and risk management executive on my staff who helps me keep this group in line as well- something that is not common in the industry."

   Ultimately, it boils down to how much of a risk do you want to take? With less due diligence, your risk remains high, so if you have the means and resources to dig deep within the confines of the local laws, then definitely do so.

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

Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com





TAGS: #tenant #landlord #creditcheck

What's It Like Being A Realtor?

Hi Everyone,

   Hope you had a great weekend, and welcome back!

   Today we are going to talk about Realtors, and we are going to hear from a few different Realtors about what they like and dislike about being a Realtor. As Alexis V. Halmy, a Principal Broker with Windermere, says, "Realtors are generally creative people who wear lot of hats... psychologist, decorator, organization guru, expert negotiator" and that, "there are all of the details of running a business...marketing, networking, systems, finance etc... So each day is different and there are new problems to solve all the time." Halmy says that basically, "a Realtors job is to protect their clients and also themselves from those murky waters."

   Halmy says that she likes to really, nail it for someone who is searching for the right thing, as well as being self employed, having a flexible schedule, with nobody to answer to but herself, and no corporate politics.

   Charles D'Alessandro, a Realtor with Fillmore Real Estate, also says that he loves working for himself, and as he says, he is, "Working for the toughest boss I could find, Me!". D'Alessandro also says that he loves when , "a deal is made ,buyers and sellers come together ,and it's all due to my efforts." Similarly, Laura Breitenstein, a Certified Short Sale Professional with Hermann London Group, says that she enjoys, "meeting new people and coming up with ideas on how to creatively market and sell their homes.", and also likes helping buyers find their next home (as she describes it, "It is really fun watching a buyer walk into a home and say "this is it" and they start figuring out where their furniture will go.").

   Patrizia Giassa, an Associate Broker with Keller Williams Realty Premier Properties, says that her favorite part of the job "is the constant challenge of dealing with different people with varying needs and wants and budgets and helping them meet their home goals.", and she says, "over the last 23 years, it has NEVER been boring! It still is fun and exciting ...a good thing, because its a lot of hard work and long hours too. :-)"

   Nancy Lynn Jarvis, a long-time Realtor, says that she got her license over 20 years ago, and she say that the job was interesting, and that, "you learn something new with every transaction.", and, "You meet great people, and awful people. Over time, hopefully you hone your people reading skills so you can tell the difference quickly and cut the unpleasant ones ( never to be confused with demanding ones) loose. You make some good friends along the way, too."

   Now, what would be a story without both Pros and Cons? One of the Cons that Halmy points out is, "Finding out something awful about a house someone is buying.... like a river of water running in the crawl space, or some other material issue that makes the buyer run. (And that can mean the loss of an anticipated commission which can be tough.)". She says that, "In this market what is hard is dealing with the frustrations of sellers who are trying to get their homes sold. They know it is a "buyers" market, they know that prices have dropped but they won't or can't adjust the price of their home to meet the market, despite all data saying that this is exactly what they need to do."

   Interestingly enough, D'Alessandro says that the thing he likes the least is, "watching what's happening with the mindset of many home owners today. They're solely focused on the monetary value of their homes and treat them more like credit cards. Instead, they should remember that their homes are their safe havens from the world, the place where they create memories, and a roof over their heads."

   Jarvis tells me that when the market, "tanked in 2008", she decided to, "sit it out for a while knowing how unpleasant a work environment it would become in the next year.", and ultimately, she says that she, "got bored very quickly and as a time filling intellectual exercise, I began writing mysteries with a Realtor protagonist and used some of the many stories I collected in real estate as background material." Jarvis says that she now has, "three books published and am writing the fourth, and that, "Killing people, it turns out, is even more fun than selling houses."

   Are You a Realtor? What are your thoughts in terms of Pros and Cons ?

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: #realtor #realestate #shortsale

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

Update on Home Prices

Good Morning,

   Welcome back, as we're half way through the week.

   Two of the leading Home Price Indices were released yesterday; the S&P/Case-Shiller Home Price Index and the FHFA Monthly House Price Index.

   The S&P/Case-Shiller Home Price Index came in with, "nine markets – Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa" at their, "lowest levels since home prices peaked in 2006 and 2007". Similarly, The FHFA Monthly House Price Index, came back with a 4.3 percent drop in U.S. prices, "For the 12 months ending in November".

   These numbers show us that there is still a long way to go.

   Double-dip in Home prices? Do you agree?


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

Running Out of Homebuyers? Are We Really?

Hi Everyone,

   Welcome back and hope you had a great weekend. This is a pretty big week, with four major housing indicators that are due to be released, which are as follows:

* 1/25 (Tuesday) 9:00 AM: S&P/Case-Shiller Home Prices
* 1/25 (Tuesday) 10:00 AM: FHFA Monthly House Price Index
* 1/26 (Wednesday) 10:00 AM: New Residential Sales
* 1/27 (Thursday) 10:00 AM: Pending Home Sales Index

   We'd like to thank everyone for their fantastic feedback regarding our Blog Post from Friday January 21st, titled, "A Funny Thing Happened on The Way to a Real Estate Deal". As we have mentioned to several of you, we will be planning a new edition of that story line with all new "Funny Real Estate Stories" (we are accepting submissions via E-mail)

   I came across a very interesting story to share with you, and the title really grabbed my attention; "The Eight States Running Out of Homebuyers". In this 24/7 Wall St article (written by Douglas A. McIntyre, Michael B. Sauter and Charles B. Stockdale), the authors state that, "The devastation in some regions will never be repaired.", and they point to population desertion, jobless rates, and the eventual possibility that, "Some homes will be torn down in these pockets of high foreclosures in the hopes that reducing supplies will boost prices."

   The states listed in this article were Michigan, Nevada, Arizona, California, Illinois, Georgia, Oregon, and Florida, and in the article, the full breakdown of each state along with the sources for the data are provided.

   This is indeed a very frightening and an eye-opening story. It is also a sad story to hear of towns literally "dying".

   Do you live in any of the states mentioned? If so, what is your take on this story? We'd love to hear an inside scoop from Realtors, investors, homeowners, and home buyers.

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: #homeprices #realestate #realtor

A Funny Thing Happened on The Way to a Real Estate Deal...

Good Morning,

   Friday is upon us once again, and I hope that you've exceeded all of the goals you set this past week.

   They say that "Laughter is the Best Medicine", and I definitely agree with that. If you look at things with the proper perspective, you can always find some funny things, and Real Estate deals are no exception to this rule. In the spirit of the joy of an upcoming weekend, we're going to look at some funny stories from the Professional perspective (Realtors, Commercial Real Estate, Loans), and also from the home buyer's perspective.

   Jennifer De Vivo, a Realtor with Charles Rutenburg Realty, provides us with what she refers to as, "funny and awkward situations when showing homes.". One example was about a homeowner that was a single male, and in the home he was selling, he had a special room..."a room completely done with Wonder woman paraphernalia...(Figurines, curtains, bed sheets you name it)". De Vivo says that he was very proud and, "made sure to point out his vintage Wonder Woman boots and asked us if he wanted to twirl for us. All we could do was smile and kindly decline. In the end our clients were able to see past the superhero customization, put in an offer on the home and closed 45 days later."

   De Vivo points to another time when she was showing homes in a community with several elderly residents, and in one of the homes that appeared to be empty, they found a man sleeping so still that he appeared to be deceased, at which point, De Vivo and her buyer raced out of the house !

   "Four years ago I was taking a loan application for an unmarried couple that was purchasing their first home.", says Matt Perillie of TheRenovationLoanGuy.com. Perillie says that when he got to the point of the application where he asked if the husband pays child support, "the man says yes and she (the wife) gives him a long look and then proceeds to yell at him for about ten minutes asking how could he have a child and not tell her. It was a bit uncomfortable and the application ended right there."

   Changing gears, there are also funny stories that come from people looking for homes. Sarah Anderson of Millersville, MD describes one specific day where her and her husband visited, "half a dozen houses one Sunday morning, and returned" to an open house in the afternoon. As Anderson describes it, there were, "toddlers running around in bathing suits", which indicated that perhaps there was no open house. However, as she says, they went in. "Fortunately, the homeowner happened to be the agent, so he wasn't too terribly jangled by our random appearance", says Anderson, but it was still "pretty awkward" since he had an open house months ago...but certainly not that day.

   Another home buyer received the, "Bomb Shelter Option". Sherri Gomez said that when they were doing their final walk-through of the home, the owner was very evasive in terms of where he would let them walk in the backyard. Afterwards, Gomez asked the man what the metal sticking up out of the ground was, and he said, "That's your bomb shelter", and, "too bad - you signed the papers !". Gomez said that she sued him for the cost of filling it in and she won. She also found out that the development, "was built in the late 50's and that was an option when you bought the property. You could choose an above ground or underground bomb shelter.", and says that, "this has become a joke in our family whenever we look at houses!"

   Well, as the saying goes...all in a days work !

   Do you have any great stories to share. Please add them here, since we all could us a good laugh !

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

What Can Go Wrong During a Real Estate Deal?

Hi Folks,

   Glad to be back with you, and I hope you're week has been smooth sailing so far !

   Now, to take a look at some things that can go wrong and dampen your spirits, today we are looking at the wide spectrum of things that can go wrong during a Real Estate Sale. For the purpose of this story, I broke this down into 3 categories: Interpersonal Issues, Foreclosure-Related Issues, and all Other Issues that do not fall into the other two categories.

   Human beings tend to fudge things up on their own without much help. "The worst problem I ever encountered in a real estate deal arose from the Sellers trying to be nice people and letting the Buyer stay in the house the weekend before the closing", says Michael D. Caccavo, an attorney in Vermont. As Caccavo explains, " The Buyers got in, found a lot of problems that they hadn't noticed during inspection, and most of all claimed the plumbing, which was mostly galvanized pipe, needed to be replaced with copper. They raised the issues over the weekend, and continued pressing for concessions during the closing, including several long conversations with the realtor who was away on vacation. The closing took 4 hours instead of 1 and the realtor caved and gave back a lot of commission to the buyer just to make the deal happen". Learning a hard lesson, he says, "Never again will I allow a client to let the buyer stay in the property before closing".

   Vickie Smith of Ark Essentials Publishing says that she had a bad experience she bought a home and then the previous owner took over a month to vacate, and she says that during that time, "we were paying the mortgage and he lived there rent free. After two months he picked up his Bully Barn. We should've had some stipulation that he paid $x per day until he totally vacated!". Adam Kruse, a Broker with The Hermann London Group, says that he had someone who had to postpone their divorce at the last minute so the sale of their home could go through before the foreclosure happened, and he says that, "it was a really touchy deal, and we actually ended up closing it."

   Jennifer De Vivo, a Realtor with the De Vivo Team at Charles Rutenburg Realty, provides some things that can and will go wrong sometimes with Foreclosure-Related deals. As De Vivo, says, "Foreclosures cause people to do funny things that can ruin months of work in an instant". De Vivo describes one of the worst stories she has come across: "Once a week out before closing a vandal busted the garage door open. At first it was a dent, but then they came back and practically destroyed it leaving it hanging horizontally. The worst of it was that when I called the listing agent (I represented the buyer), they did absolutely nothing. I took matters into my own hands and pasted no trespassing signs in bright orange throughout the home exterior. My husband and partner went with one of our helpful investor clients and righted the garage door. My buyers were troopers through it all and still bought the home which was in foreclosure and the absentee owner was oversees.

   De Vivo also describes another incident: "We had another incident where we represented a buyer in a short sale situation. We closed on a home on a Friday, and over the weekend the original owner came in and stole the entire kitchen and bathroom vanities, even the toilets! Luckily my partner called the title company on Monday morning minutes before the title had been filed and was able to cancel the deal and get our clients' money back. Whew!"

   As a Real Estate Investor, Jeff Swaney has come across additional issues during Real Estate deals.

   Swaney says that Appraisal problems, which he calls, "the most rare issue from the past" is becoming more common now. He describes this as follows: "The lender orders an appraisal and then rejects their own ordered appraisal due to their underwriter initiated computer based desk top review (also called an Auto Valuation Model, or AVM). The problem for the buyer is that most standard purchase and sale agreements have an appraisal contingency, but NOT a lender initiated AVM value contingency. This means that a buyer would be contractually required to buy the home even if the lender cuts the value and the loan amount. The reason is that the actual appraisal was OK, but the lender did not like it. If the buyer has this situation occur, they must close and pay the difference in loan amounts out of pocket, or they will lose their earnest money. Buyers need to be aware of this possibility and have their agents draft a lender induced valuation reduction contingency in their contract, or they face significant exposure.

   Liens that are filed, but not yet recorded at the local courthouse, is another major issue Swaney has seen. he says that, "There is typically a gap period between the time a lien is filed and when it shows up in courthouse records. Most closing agents will require a seller to sign a gap provision that affirms the seller is not aware of any liens that have not been paid off against the house. The buyer's title insurance policy should discuss this as well. I have been to closings where prior liens were not caught and the title becomes "clouded" causing a delay or cancelling of the transaction.

   Finally, Swaney points to issues with Home Owners Association (HOA) liens, and says that, "For most foreclosures, junior liens are wiped out after the foreclosure auction or lawsuit. The only normal exceptions are property taxes and state and federal tax liens. HOA's get around this provision by simply reassessing the past due liens against the next homeowner. Beware of this because the second most powerful group to fight is the local HOA! You could find yourself as a seller stuck with paying an old (prior owners lien) off if you sell a property purchased at the local foreclosure auction. This can cause transactions to fail as the seller is not willing to pay the past bill and wants to fight the HOA. Good luck doing that. The HOA's know that it will cost you more to fight the bill than just pay it!"

   Real Estate Deals are tough! That's why it is a field that requires determination, guts, and meticulous attention to details...and sometimes a little bit of luck. Any comments? Suggestions?

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: #realestate #foreclosure #realtor #realestateinvesting

Cloud Computing and Real Estate

Hi Folks,

   Glad to have you back. If you are lucky enough to have the Holiday off for Dr. Martin Luther King Jr. Day, I hope that you have a nice, relaxing day planned.

   Lately, every time you turn on your TV, you hear, "To The Cloud", or "Cloud this", and "Cloud that". What exactly is this, "Cloud". Well, this is not the kind of cloud that you see in the sky. This is referring to a virtual cloud, where a sky cloud has billions of little droplets of water, and the Computing Cloud has billions of servers hosting Web sites and Web Applications ("Apps").

   As Wikipedia refers to it, "Cloud computing is location independent computing, whereby shared servers provide resources, software, and data to computers and other devices on demand, as with the electricity grid.", which is the "Cloud", or you can even think of it as an ocean. It's huge and made up of billions of pieces.

   Now, as Cloud Computing relates to an industry, such as the Real Estate industry, Wikipedia continues to say that, "This frequently takes the form of web-based tools or applications that users can access and use through a web browser as if it were a program installed locally on their own computer." So, to break this down, a Realtor or an investor can be on the road looking at homes, and can pull out their laptop, IPad, IPhone, Droid, etc, and can access a Web Site that can run the same Home-Valuation App that they can run from their desktop in their office. Thus, they are accessing the "Cloud" to do exactly what they can do from their office. As long as their is a connection to the Internet, they can do this.

   Hopefully, this can give you a good understanding of how Cloud Computing is and how it relates to the Real Estate industry. Things have come a long way since my Commodore 64K Computer in the 80's! (Now, I'm dating myself with that statement !).

   Did I miss anything? Comments? Suggestions? We'd love to hear

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: #cloudcomputing #realestate #realtor

Extremely Unique and Innovative Ways to Cut Energy Costs

Hi All,
   Hope all is well in your world this Friday.

   During the summer, we reflected on some "Tips to Save Money on Your Electric Bill", and now that the deep-freeze is here, I think it's time that we revisit the topic, but with an eye on some unique and innovative ways to cut costs. We spoke to some folks with some great ideas, and we'd love to share them with you.

   Javier Zuluaga of Home Repairs and Remodeling, LLC, says that he is currently running an experiment with the electrical water heater in his home. Basically, Zuluaga says that the water heater shuts off at 11PM-5AM, and again it shuts off from 10AM-4AM, as he says, "thus saving 12 hours of energy use during the day...equating to 6 months of not running your water heater in a year." Zuluaga says that they started the experiment January 3rd, so they will know by next month if they had, "a significant difference in our electric usage."

   Reggie Marston, President of Residential Equity Management Home Inspections, with 38 years experience in residential construction and home inspections, suggests that you, "Turn down the temperature of the hot water heater. Water heater manufacturers recommend that the temperature of the water not exceed 120°-125°.", and says that he regularly inspects homes, "where the temperature of the water is 140°-160° plus. Temperatures above 125° are unsafe, 160° water takes 1/2 second to scald skin, at 120°, takes more than 5 minutes to scald. People spend all that money to heat the water excessively and then hop in the shower and turn the cold water on to lower the temperature of the water to a temperature that the skin can tolerate. It wastes a significant amount of money to keep water at 140°- 160° twenty four hours a day 365 days a year."

  Zuluaga suggests that sealing up doors and windows makes a slight difference, and Marston says it is a good idea to check and see if the windows are locked and the locks are adjusted. Marston says that he inspects many homes where the owners doesn't lock the windows, which means that, "If the windows aren't locked the sashes don't get pulled together tightly and the air rushes in through the gap between the upper and lower sashes. If the locks aren't adjusted properly the top sash of the window can slip down ½- ¾ inch.", and says that since the windows are hidden behind curtains or blinds, "the owners don't realize that the top sash is open and they're losing all their conditioned air they're paying to heat out the open window."

   In speaking about ducts/heating/cooling, Zuluaga suggests changing out the duct system to a flex duct system that is well insulated, and, "sealing up with special mastic the vents where the air exits into the home to ensure the air is flowing into the living space, not attic space." Marston adds that servicing of the heating system should have been done in the fall in preparation for winter, and what the owners should do is, "ensure that they replace or clean the furnace filter on a regular basis. A clogged air filter will cause the furnace to work harder to pull air through the system. The harder the furnace has to work the more expensive it is to operate."

   Marston says that most builders of older homes and even some newer homes, "don't insulate behind electrical boxes installed on exterior walls. When it's cold that un-insulated area allows a substantial amount of air leakage. If the owners can put their hand in front of the electrical receptacles and switches on a cold day and feel cold air rushing in they should purchase those felt type receptacle/switch insulation pads and install them on all of the exterior wall electrical boxes. I recommend they shut off the electric power to the devices prior to removing the cover plates so they don't come in contact with a live contact." Zuluaga suggests removing all the insulation in the attic floor, "filling in all the cracks where you see daylight from below with foam, and then blowing in foam on the rafters. This creates a very well insulated home, one in which in the heat of the summer the temperature differential between the attic and the living space below is only 10 degree difference, not the 30-40 degree difference...which then causes the hot air above to find a way into the cooler living space below, hence the AC unit ends up working overtime."

   "Ensure that fireplace dampers are closed except for when there's a fire burning", says Marston, and that, "Most people that have fireplaces don't check their fireplace dampers to make sure their closed. It the damper is left open it just allows all the conditioned air in the home to escape." Further he adds that, "With the popularity of these pre-fabricated gas fireplaces the owner should check the compartment below the firebox where the gas line enters to ensure all the holes around the gas line and wiring have been sealed appropriately. Most of the fireplace installers/builders don't seal the holes in the prefab fireplace and cold air rushes in. I've done inspections for folks who have told me that if they leave a glass of water on the prefabricated fireplace hearth in the winter overnight the water will freeze in the glass."

   Michael D. Greaney, CPA, MBA makes a suggestion that might not, "work for everyone", but he says that, "if you have an apartment or condo with a southern exposure — let the sun heat it up during the day, and turn the lights ON at night after drawing the drapes.", and adds that he has lived in a condo with a southern exposure for ten years and have never had to turn on the heat." "Installing Solar Tubes", suggests Zuluaga, "which is basically a tube that allows sunlight to come into a bathroom, kitchen, family room...natural lighting." to help you avoid turning on the lights.

   Author Shel Horowitz says that, "Most homeowners can save significantly on energy, materials. and water costs, by thinking strategically and holistically.", and suggests that you purchase some, "inexpensive outlet protectors (the kind to keep babies' fingers out) and insert them in your outside-wall sockets that don't have plugs." Horowitz also recommends plugging "computers, AV equipment, copiers, etc. into power strips, and turn the whole strip off when not in use. These appliances waste a lot of power in off-but-ready mode.

   Horowitz says that, "Thinking differently - like every time you bake a casserole, throw in a few potatoes that you can bake for free at the same time.", and, "Next time you need a printer, buy a duplexing one (prints on both sides). They've come way down in price, and mine paid for itself in saved paper within a few months. This indirectly saves energy, since enormous amounts of energy are consumed in paper production."

   Additionally, Zuluaga suggests planting a "patio", or a "shade tree" in front of south and west facing walls/windows., since that, "In the summer the shade put simply keeps the suns rays off the windows and exterior wall thus reducing the amount of work the AC unit has to put out to keep that area cold" and suggests switching, "regular light bulbs to CFL bulbs...even better, switch to LED lighting and save over 50% on energy costs for lighting."

   In closing, says Marston, "As a home inspector I inspect many homes and find numerous issues that home owners can do to help save energy costs that cost little to nothing to accomplish, normally these issues are just oversights on maintenance type issues."

Do you think these tips will help you save on energy costs? We'd love to hear your comments!

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

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

A Special Interview with Our Head Web Designer

Hi Folks,

   What can I say? Snow, Snow, and more snow coming. Remember a few years back when we didn't get a snowflake all winter? Well, winters is back with a vengeance !

   Today, I'd like to give everyone a long overdue look at our main Web designer, David Davis of DCGWS Internet Solutions. First, just a little look back in time to 2008. At that time, we had been in business for over 6 years, and business was going really well. However, we were operating in the "Stone Age", and we were basically entering in all Ads manually on the website. There was no user control panel, and the lines of communication were getting more difficult as the business was growing.

   I realized that in order to keep growing and to continue to provide quality customer service, I needed to upgrade my site with a database, along with some automatic features to keep the flow of information as timely and efficiently as possible. And so, my search began...6 solid months of looking for and interviewing web designers. In all of that time, the only designer that I spoke with that really "got me" and knew exactly what I wanted was David.

   I have posed a few questions to David for the purposes of this interview, and here are his responses:

Question 1: "David, for the purpose of this interview, can you provide some comments about our website, Lease2Buy.com?":

David: "Lease2buy.com is a real estate listings website powered by Linux, Apache, MySQL and PHP OOP (Object Oriented Programming). It is in my humble opinion, the best and most successful website in it’s class."

Question 2: "How far has the site come along since you came on board?":

David: "When I took over the programming of lease2buy.com. the entire website and all its property listings were static pages, meaning all manually added and edited. Rob asked me to completely automate the site and that was what I did. An end user can browse the site, buy an ad or even multiple ads via a major credit card or PayPal, and once the transaction is completed, the ad becomes “live” without any interaction from the website owner or webmaster."

Question 3: "Can you comment on the Security of the Website?":

David: "The site has PHP session based logging, and uses encrypted passwords for both the user back end and site administrator back end."

   David, thank you for a wonderful job. Your work ensures the integrity and efficiency of all visitors to HomeRun Homes (www.Lease2Buy.com), and provides excellent security for those placing Ads on the website. Keep up the good work.

Please post your comments (and Kudos!) to David !

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: #Linux #Apache #PHP

Do Banks Really Forgive a Mortgage Balance After a Short Sale?

Hi All,


   I hope you had a great week, and if you're in the bulls eye of the next snowstorm as we are, I ask you to be careful and drive slowly !

   We recently received the same question from a few different people, and we would like to address that question today. We were asked approximately, "how often is a mortgage balance "forgiven" after a Short Sale?". We posed a few related questions to some professionals with quite a bit of experience, and we'll cover each question along with the answers below.

Question #1: "Will the house loan company forgive an outstanding balance after a home is sold on a short sale"

   David Bartels, an agent and a short sale negotiator, tells us that, "Absolutely. This happens almost every time on transactions we negotiate". Greg Cook, a Mortgage Professional, says that, "In a short sale when the balance of a mortgage debt is "forgiven", the lender almost always will issue a 1099 for that amount.", and continues to say that, however, the "the Mortgage Debt Forgiveness Act of 2007, provides for no tax liability on owner occupied properties up to $2,000,000. So while the debt may be forgiven there is no income tax liability." Cook adds that, "Whether or not a lender chooses to pursue a deficiency judgement for that amount is 1) at their discretion (and) 2) subject to state laws, and this can vary from state to state". Robert Nagle, an attorney in Phoenix, says that he has, "represented over 200 homeowners regarding strategic default. In Arizona, due to the anti-deficiency statutes, most first mortgages (purchase money and refi) forgive deficiencies, and certainly purchase money seconds do, too."

Question #2: "Are there any "rules" that say what amount, if any, will be forgiven?":

   Bartels responds and says that, "Each lender has their own guideline they use to determine whether or not to pursue a deficiency balance. They are not disclosed to anyone. Pursuit of deficiency judgment varies widely and is determined by the investor (owner of the loan).". Additionally, he says that, "For the most part the lender you are negotiating with just services the loan. They do not own it and take direction from the actual investor (owner or the loan)."

Question #3: "Do these rules differ from state to state?":

   "Yes", says Bartels, "CA for instance is a no-deficiency state. This means a lender cannot pursue a deficiency on short sales in CA. On Jan 1 this was expanded to include non owner occupied homes. Exceptions are some(times) made if the homeowner took cash out and used it for something other than improvements on the subject home."

Question #4: "Do they differ between a first house loan and a second house loan (i.e. first is paid off, but a balance remains on the second)?":

   Bartels reminds us that, "A short sale cannot occur unless 2nd releases the lien on the property. This is done via the short sale negotiation. There is no circumstance where a short sale could occur, but the 2nd lien holder does not release the lien.". Cook adds that, "Second mortgages are an entirely different game and will depend on lender and state law.", and adds that, "I was on a conference call with the head of loss mitigation (western division) for Bank of America and he said he had not heard of one lender pursuing a deficiency judgment. Reason? "You can't get blood from a turnip" and pursuing the judgment only increases costs to the lender and the former homeowner is likely to BK out of it anyway." Nagle chimes in on the equity second loans, and says that, "The rule of thumb that I feel the lenders are following is 10 cents on the dollar and a full release IF the borrower does a short sale. The gloves come off if the home has gone through foreclosure."

Question #5: "If it is not forgiven, what happens then?":

   Bartels says that the short sale negotiation and the release of lien negotiation are separate, and that, "When we get an approval that is conditioned on a cash contribution or a deficiency, we have a 2nd negotiation to pay the amount or pay an amount in exchange for no deficiency judgment. There are several ways to do this. We have been successful 100% of the time eliminating deficiency judgements post short sale for our clients so far." Cook says that, "In California, there is no deficiency judgment allowed on owner occupied properties for the loan used to purchase or renovate. As of today, refinanced loans may still be subject to deficiency judgment, but that is likely to change once the new legislature gets their feet under them (it passed in the last session but was vetoed by the Governator)."

   Overall, if you are facing a short sale as an option, it is important that you speak with your mortgage company (all of them), obtain approval for the short sale, consult an agent and also a Real Estate attorney. Make sure you have a plan from A to Z in place before setting it in motion.

   Have we missed anything? Comments? Suggestions?

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: #shortsale #foreclosure #lossmitigation #loan

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

Factors Influencing the Psychology of The Rent to Own Market

Hi Everyone,

   Welcome to 2011! I hope you all had a wonderful and safe Holiday weekend.

   A lot of factors are involved in the Rent to own Market, and the ripple effect from any of a number of housing market changes or economic changes can be far-reaching. Dale Siegel, who writes the excellent Blog titled, "Diaries of a Mad Mortgage Broker", had recently asked us to write an article about the psychology of the Rent to Own market, and since her Blog has such a great reputation, we just couldn't resist !

   The Article, which is titled, "The Top 5 Factors Influencing the Psychology of The Rent to Own Market in 2010", is in the most recent section of her Blog, so head on over to have a read. Hopefully, the article will get you to think outside of the box when it comes to analyzing the effect of different events on the Rent to Own niche of the Real Estate market.

   Do you have anything to add to this? What are your thoughts on the psychology of the Rent to own Market? How about the Real Estate Market in general? We'd love to hear from you !

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