Wednesday, March 23, 2011

Is Rent to Own for you??

Rent to own has its pros and cons. I have been getting so many calls this week from buyers asking if I had any homes available for rent to own. I decided to write this note about the pros and cons for a buyer if they decided to do this. It was scary to see how many people were so uneducated about it and who weren’t even going to research it to find out what their risks were! They were just desperate to live in a home they weren’t researching this.
Here are the advantages:
1. Perfect solution to live in a home if you have past credit problems
2. If you are going through a divorce with children and need to live in a home
3. If you can not afford a down payment
4. It is very easy to qualify most of the time credit score isn’t even considered.
5. You can try the home out before you buy
Here are the disadvantages:
1. The tax benefit of OWNING doesn’t exist.
2. You do not get a huge variety of homes
3. You have to settle for a home that you wouldn’t normally settle for if you were able to buy
4. The sales price in some cases isn’t negotiable
5. Most of the time the homes that are available for rent to own is a home that the seller can’t sell. In most cases the home has been on the market for a year or longer
6. What are the penalties if you can’t buy or decided not to buy? READ THE AGREEMENT!!!
7. Are there any liens on the property? This is something that is checked by a title company when you are purchasing the home. When you are renting the home you skip this process! When it is for you to purchase the property the title must be clear of all liens.
8. What happens to you and your family if the owner stops making the payments to the mortgage company? What happens to your down payment?
9. What happens if your contract states you must pay X amount for the home and values drop again! Are you stuck paying the higher amount? Do you lose your upfront money?
10. If you are renting a new home from a builder READ THAT AGREEMENT!! The first year payment may only include the rent without full assessed taxes! This could change your 2nd year payments by $100.00’s per month!!!

There are so many problems that exist with this program. I had a girl call me yesterday in tears because she had signed a lease to own a year ago. The agreement said that she had to buy the home after 2 years. During this time she paid every month on time. She found out that the seller wasn’t making the mortgage payments and the bank had begun foreclosure!! She is now going to lose her $3000.00 deposit and has to find another home in 30 days for her and her 3 children before she ends up on the streets.
Today a couple called to ask me if I could help them get out of their lease to own contract. After reading through the small print the builder was charging them a $6,000 penalty if they couldn’t close when the rent to own period was up!! They couldn’t buy because their credit scores were still very low. Now they are out their upfront money they put down and on top of that a $6,000 penalty for not closing!!
Please read the fine lines!! If it sounds to good to be true it probably is!! Why would you want to settle on a house that has been sitting on the market for YEARS!! This is a buyers market, rates/prices are low, and there are many programs available with little or no money down!! Even if your credit scores are low work on getting them up so you can actually take advantage of this BUYERS MARKET!! A rent to own is ONLY HELPING THE SELLER!!! Call me if you need help building your credit! I have a program in place to help raise your credit scores so you can buy your dream home when the time is right!

BUY A HUD HOME for 50% OFF OF LIST PRICE!!!!

Listen up!! Are you or someone you know a Firefighter, Teacher, Law Enforcement, or Emergency Medical Technician?? If so please contact me to get a list of HUD Homes that qualify for the Good Neighbor Next Door Program! This program offers a 50% discount off of HUD Homes!! That's right!! If the house is $100,000 you can buy it for $50,000!!!! What are you waiting for!!

Please have them contact me at hay.molly@gmail.com or 614-581-2086! This is a new program and I am not sure how long it will be around! Message me for details!!

I am an experienced HUD agent and would love to help you or anyone you know that may qualify for this program!

Molly Hay, HUD certified REALTOR
Re/max Town Center