Variations on a Rent-to-Own Theme

The popularity of Rent-to-Own arrangements has grown during the past few years. Because some would-be Apollo Beach home buyers have suffered the direct consequences of the widespread economic downturn and slow recovery, rent-to-own deals can rescue transactions that would have been impossible through regular purchase and mortgage financing arrangements. If a potential buyer’s cash flow seems strong enough to support an eventual purchase, rent-to-own can overcome credit or cash shortfalls.

In a typical rent-to-own deal, the landlord and tenant execute both a lease and a sales contract at the same time. The tenant usually pays an option fee upfront as well as an agreed-upon amount in excess of the rent payment each month. The landlord applies these additional payments toward the tenant's eventual down payment. As a result, the tenant no longer has a feeling that he has nothing to show for his monthly rent payment, and the landlord has current cash flow plus the warm feeling that at a time certain his property sale will be completed. Everybody is delighted.

However, there is always some potential for less than smooth sailing in a rent-to-own deal, and all parties should be clear about what they are.

The primary risk to the tenant/buyer in the kind of rent-to-own structure I have just outlined is the possibility that the tenant might not be able to complete the purchase at the end of the option period. When this happens, it usually results in the tenant's forfeiture of both the option fee and the payments made in excess of the rent amount -- money the tenant could otherwise have saved or used to resolve credit issues.

There are also a number of ways to make a rent-to-own deal more favorable to the tenant. The first is to make the option fee applicable to the down payment if the tenant purchases at the end of the option period. In addition, the contract can allow the tenant to assign the purchase option in the event that he is unable to make the purchase. This way, if his real estate agent can find another buyer, he may recoup some of his investment. Such a contract might also entitle the tenant to a refund of a portion of the value of improvements he may have made in anticipation of purchasing if he is unable to complete the purchase.

Because a rent-to-own deal can have many possible details, both tenant and landlord are well advised to work closely with experienced real estate and legal professionals from the outset. Our office is here to furnish the knowhow that helps turn Apollo Beach rent-to-own and other real estate possibilities into realities.

Time to Buy Your First Investment Property?

If you are a newcomer to Apollo Beach real estate investing, finding your first income-generating property can seem like a fairly daunting task. How can you be sure that a property will generate enough cash flow? How will you estimate your costs to put potential homes for rent into the profit column? Altogether, how will you know when you find the right opportunity?

First, you have to view the competitive landscape in Apollo Beach this 2012, which means doing some targeted research. You might start by attending local seminars or looking into an Apollo Beach property club. These types of groups can help arm you with the economic trends that will serve as a guide. You will also want to call one or two reputable Apollo Beach property management companies to get a general idea of the costs you should expect when listing homes for rent with their firms.

In today’s market, the demand for quality homes for rent and the rents they command are generally up. Given an increased demand for rental properties, it is reasonable to predict that even as a new investor you should be able to find qualified potential tenants within a reasonable timeframe. However, the tenant qualification process can be tricky. It is peppered with legal and Fair Housing rules, so you should be prepared to either educate yourself thoroughly on the laws or hire a professional property manager or leasing agent to handle this aspect.

Overall, the market in homes for rent has trended higher, but your new business will prosper or not based on the cash flow for the property type you choose to enter. Many neophyte real estate investors consider beginning with a condominium, and for practical reasons. Homes for rent can bring with them a multiplicity of unique –sometimes unexpected-- problems, whereas most condos come with HOAs that handle roof, exterior maintenance, and even many more problem-preventing features.

Experienced real estate agents are there to help you find prospective properties and to furnish professional advice along the way. Please feel free to call me anytime for market advice if you have ever considered looking into the Apollo Beach homes for rent market.

The ‘Way Home’ Following Foreclosure

Losing a home to foreclosure is a truly disheartening experience for too many homeowners these days. It’s an unfortunate outcome for many otherwise model citizens: typical hard-working adults who fall victim to circumstances which are sometimes simply beyond their ability to control. It can happen for any number of unforeseen reasons: illness, divorce, or simply the repercussions of the larger economic forces that cause a job loss or closure of a business enterprise.

Whatever the cause, when a foreclosure happens the immediate problem is "‘Where do I live now?" quickly followed by "How long will it be before I can buy a home?"

Our Apollo Beach office is no stranger to this question; but the good news is that a foreclosure is an obstacle that can be overcome. The realistic news is that it will usually take time – and although ‘eventually’ is not a word that fosters optimism, it is one that describes "the way home".

To buy a home after a recent foreclosure you have three possible routes. The first is the shortest: it is appropriate only to those whose financial future is already strong, and who are willing to pay a high price. The risk that loan officers must attach to anyone with a foreclosure in their recent past is substantial, and to compensate for it, expect any proposed offer to combine a smaller mortgage (made possible by a more substantial down payment: possibly 20% or more) with a high interest rate.

For the vast majority of people, the second way to buy a home is the most common. It’s the one that involves substantial repair to your financial profile. The guidelines that mortgage officers follow are understandable: they read your financial history in order to predict the future: will you repay a new 30-year mortgage? Will your payments be late? To make sure the right answers are apparent, do the obvious: reestablish the kind of credit story that makes the foreclosure look like a one-of-a-kind bump on an otherwise smooth road.

Realistically, you will need to spend at least a couple of years saving money and paying bills. Two years at the same job with stable income is usually the minimum requirement for any lender. It is also of key importance that you make absolutely sure you do not miss payments of any kind. Your FICO score will have suffered enough after a foreclosure (often 100 – 150 points). To demonstrate that you are fully capable of handling the substantial debt of a home loan, you need to spend a convincing amount of time making consistent on-time payments for all your bills. In the meantime, you should expect to rent a home. The regular payment of that rent will be a key part of the story you will be demonstrating.

It is in this area that there exists a third possible pathway: the lease option. It is an additional wrinkle that can shave time from the gap between a foreclosure and buying a home. A lease-option can be a handy way to get one foot back in the home ownership arena while taking the time you need to rebuild your financial history. With a lease-option, you sign a contract with a seller to buy a home at an agreed-upon price within an specified period. This can allow time to reestablish your financial footing as you get back to work, save some money, and pay bills. Since this is a binding legal contract, it is wise to seek the help of an experienced real estate agent or attorney. Contact me if you would like to discuss this or any of your own questions about how to buy a Apollo Beach home in the future.

What Makes Great Real Estate Listings?

Real estate listings can be more than uninspired collections of data outlining the physical characteristics of a residence. They are often the first introduction a potential buyer has to a property: and that property may be the one that winds up becoming an important part of a family’s life together. Whether they are listed online, via brochure or in the local classifieds, great real estate listings are usually a seller’s first – and often only – chance to seize the imagination of potential buyers.

For 2012’s Apollo Beach buyers, modern real estate listings are an unmatched time-saver. They bring a plethora of information that’s available 24/7/365. They shortcut the process of finding the right home in the right area at the right price, and they make it easy to find key information that allows comparing otherwise dissimilar offerings. The energy saved can make the difference between settling for an ‘almost’ right property and zeroing in on the perfect choice.

Checking the real estate listings online before actually visiting properties means saving time, effort, and money all at once. Not only are previews of prices and photos of the houses being offered available online – but also a wealth of information about the area, the local sales statistics, and, for out of town shoppers, an almost limitless depth of neighborhood facts. Websites like Trulia.com, Realtor.com, Zillow.com are just a few of the many sources of online real estate listings that include an abundance of extra information.

On the other hand, not all sources of online real estate listings are regularly monitored for timeliness or accuracy of information. Veteran househunters are familiar with what happens when less than professional sources result in unreturned email inquiries or unwanted solicitations. Lack of prompt (or even no) response is also more frequently possible when the listing in question deals with a foreclosure or short sale.

My website offers up-to-the-hour information on 2012's home market. The Apollo Beach real estate listings you find there are always accurate and designed to maximize your ease of browsing. If you haven’t visited already, take a few moments to look through our real estate listings, then give me a call to chat about your home search: what you’ve found, and what you’re looking for. There is, after all, no substitute for local market experience – and the greatest real estate listings are the ones that steer you toward the home and the transaction you’re looking for.

"What’s Most Important in a Real Estate Agent?"

What would you guess is the most important skill or quality when it comes to choosing your Apollo Beach real estate agent? Since that real estate agent is someone who will play a key role in the financial event most families consider the most important they ever face, it’s well worth investigating. When you buy or sell a home, it almost always turns out to be an indelible milestone in the family’s history. So what quality is most important in making the choice of who you want to play that key role?

March 2012 the National Association of Realtors announced the results of a survey that addresses the question in a serious way. As published in their Economists’ Outlook, the answer is both surprising and – when you think about it – not so surprising at all.

Communication and negotiating skills both come up as key factors that buyers consider important. Both qualities are considered necessary to instilling confidence among the parties to any home sale. Nobody wants any surprises during the process; everyone wants to know what’s going on at all times.

Knowledge of the real estate market, which is key in establishing and relating the real values in a home sale, is valued even higher. Knowledge of the purchase process -- the ins and outs of the technical details of what is often a complex series of requirements -- is thought to be even more important for a real estate agent.

But those are not the most valued quality according to the NAR survey, which was national in scope. It queried a national sample of actual recent buyers of new and previously owned homes, so the answers they report are based on real experience with real estate agents by real home buyers.

Slightly more important was ‘responsiveness’ -- which I personally think of as the service side of communication. It means that the national sample of home buyers think a good agent not only knows the right answer to the many questions that come up, but also knows how to answer the phone!

So that leaves the last and greatest quality that real buyers value: and it’s the hands-down winner with an overpowering 98% of all buyers in agreement. The quality is honesty and integrity. More important than knowing the market? Than people skills? More important than keeping in touch? More important than mastery of the legal and technical issues?

You bet!

　

　

Positive Economic Signs for Real Estate

Enough already! Economy this! Housing market that!. It seems like we have been bombarded with mostly bad news forever. Every month Apollo Beach would-be home sellers and prospective buyers hope for signs that the economy has turned around, and March 2012 was no exception. But despite the relatively good news that unemployment numbers continue to show promise, the question remains: just how will we know when the Apollo Beach real estate market begins its upswing in earnest?

Market forecasting is always a bit like reading tea leaves, but for a change let’s take a look at three areas that could be indicators of positive economic signs for a real estate recovery:

Shrinking Inventory

Inventory is one of those real estate terms that can be misunderstood by anyone who thinks of its everyday meaning. Instead of being the total number of homes on the market, in real estate the term "inventory" is often expressed in months. It describes how long it would take to sell all the homes currently on the market if no new homes were listed.

When housing inventory shrinks, it means people are buying homes – a solid positive economic sign for real estate. While there are currently signs of shrinkage nationwide, the experts remain cautious due to what is known as the "shadow inventory." These are homes that are in the foreclosure process but not yet on the market. It also includes those homes owned by folks who are putting off selling until prices recover. The experts at CoreLogic estimate that in the last quarter there was a five-month’s supply of shadow inventory. This may increase as lenders release more distressed properties onto the market.

Unemployment

Among the most important economic signs to keep your eye on are the unemployment numbers. Rampant unemployment -- and the resultant concern over job security -- drags down consumer confidence in Apollo Beach and everywhere else. But when people begin to get back to work, confidence always builds. That is why it was an early positive sign for the real estate industry when the U.S. Labor Department came out with its 2011 unemployment numbers. They are falling, and now sit at 8.6 percent -- the lowest level in over two years. According to the Washington Post, the broader figures suggested that while this improvement may be modest it is also "widespread".

New Housing Starts

When the economy begins to look healthy, homebuilders begin construction. Getting that right is of vital importance to them. Signs of a recovering new home market began back in September when construction increased a healthy 15%, according to RisMedia. While the experts consider this an optimistic sign, they again urge caution.

So while the economic recovery is still sluggish, there are some stirrings that the worst may be over. If so, one implication for Apollo Beach homeowners and potential buyers is that keeping an eye on market trends is once again a good idea.

April Showers Bring May Sales

Once you decide that the time has come to sell your house, Apollo Beach’s open houses are one of the most promising ways for you to show off its fine points. And early spring has long proved to be one of real estate’s peak selling seasons. Despite the fact that April, 2012 can bring unpredictable weather to Apollo Beach, it’s undeniably prime time to use an open house to market your home.

Open houses are popular for the simple reason that they provide maximum exposure to house-hunters, whether they are casual or more highly motivated. Particularly when a home is occupied, open houses invite easy access to a property, side-stepping all the normal hurdles of appointment making, phone tag, calendar syncing, etc. Since vacant homes are easy to show any time, they tend to get more exposure (especially since prospective buyers frequently phone at the last minute to request a tour).

Open houses are a way to even the competition. Held on a Saturday or Sunday afternoon, they provide the easiest way for potential buyers to browse. Prospects can casually pursue their search without having to commit to a day full of appointments. For them and for the seller, it’s a handy tradition.

But what if it turns out to be one of those Apollo Beach rainy days?

Ideally, everyone plans their open houses with a bright, sunny day in mind. But when the clouds gather, you don’t need to let a little inclement weather wreck the opportunity. When it turns gloomy outside, think of it as the perfect opportunity to make your home shine on the inside. Open all the blinds, turn on the lights, throw some upbeat jazz on the stereo, and crank the heat up! Another nice touch (especially if you want to come home to a clean house) will be to place towels or mats by the front door so that attendees can wipe their feet.

Looking to go the extra mile? Provide hot chocolate or hot tea in disposable cups for your agent to offer browsers. At the very least, they’ll be sure to remember your open house!