Risks and Benefits to Buyers
For many people, a home will be the biggest purchase they ever make. Both buyers and sellers should carefully weigh their options before agreeing to any binding contract.
Let's look at some advantages and disadvantages for buyers:
• Buyers have time to build income and repair their credit history as they rent the house.
• Depending on the agreement, renters can walk away if they find something seriously wrong with the house. Although the renter will lose the option fee and all their rent credit money, that amount will be much less than if the renter had bought the house outright and tried to leave it later.
• Buyers still have to pay the upfront option fee. It's usually a percentage of the agreed-upon selling price of the home and is often only slightly more than the typical rental security deposit on the same home, but gives you the option to purchase the home.
• If the buyer is late on a month's rent payment, most agreements void the rent credit for that month. The buyer in the rent-to-own agreement must pay on time, every time. Pay your rent on time, or early, and you'll earn the benefit of rent credit toward the purchase price of the home. It's like putting hundreds of dollars in a savings account every month simply by paying your rent on time.
• At the end of the rental period, the buyer still may not be able to buy the home for the same reasons they couldn't buy at the start of the lease: bad credit, insufficient down payment, not enough income. The seller can't fix these issues for you, you have to decide to make changes to improve your life, then follow through with them. The rent to own contract gives you time to address these issues, and a powerful motivation to improve your situation.
• Major repairs -- like replacing a furnace or roof -- are usually the responsibility of the seller during the rent to own option period. But the minor repairs that used to be somebody else's problem in a rented apartment often become the responsibility of the new buyer, even during the rent to own option period. Home ownership has it's rewards, but it also has it's responsibilities. When you rent to own, you often take on homeowner like responsibilities, such as minor repairs up to $150.
-- by Sarah Siddons and Chris Opfer
We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info. Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Tuesday, January 28, 2014
Tuesday, January 21, 2014
Zillow Forecasts 3 Percent Gain In Home Prices in 2014
Real estate giant Zillow combined data on unemployment rates, population growth and its proprietary Home Value Forecast to determine which direction the real estate market is headed, along with critical key factors associated with it. The results might surprise you.
First, home values will increase. While the increase isn’t much – 3 percent – it is good news for areas that have continued to sink lower and lower from a real estate perspective. The hottest housing market in 2014 will be the capital of Utah, according to Zillow.
For buyers, even though mortgage rates will near 5 percent by the end of the year, Zillow said getting a mortgage loan will be easier.
Erin Lantz, director of mortgages at Zillow, said that fewer homeowners will be refinancing due to higher interest rates. That loss of business will force lenders to compete for more new home loans to offset their losses from the refinance side of the business. The end result, she said, is that lending standards should loosen up.
While higher rates will make homes more expensive to finance – the monthly payment on a $200,000 loan will rise by approximately $160 – mortgage rates in the 5 percent range are still very low.
“Because affordability is still high in most areas relative to historical norms, rising rates won't derail the housing recovery,” Lantz said.
Still, she cautions, affordability is starting to become a concern for some booming markets, such as in parts of California. Many metros saw appreciation well above historic norms, sometimes 4 or 5 times their historic appreciation levels. As mortgage rates increase, home prices rise, and a larger housing supply is created by fewer underwater homeowners and more new construction, home values in those areas will see slower improvements.
Despite an easing of lending standards, don’t expect to see the lax lending that led to 7 in 10 people obtaining mortgages in the late 1990s and early 2000s. The homeownership rate will fall below 65 percent for the first time since 1995, according to Zillow, which is a more normal level.
-- By S.E. Slack
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We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info.
Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Our primary focus is on homes in the Chicago suburbs, but we have associates who have Rent to Own homes available NATIONWIDE! Whether you're looking for a Rent to Own home in Chicago or Chattanooga, Illinois or Alaska, we can help you find that home! Contact us and let's get you into a nice new home!
First, home values will increase. While the increase isn’t much – 3 percent – it is good news for areas that have continued to sink lower and lower from a real estate perspective. The hottest housing market in 2014 will be the capital of Utah, according to Zillow.
For buyers, even though mortgage rates will near 5 percent by the end of the year, Zillow said getting a mortgage loan will be easier.
Erin Lantz, director of mortgages at Zillow, said that fewer homeowners will be refinancing due to higher interest rates. That loss of business will force lenders to compete for more new home loans to offset their losses from the refinance side of the business. The end result, she said, is that lending standards should loosen up.
While higher rates will make homes more expensive to finance – the monthly payment on a $200,000 loan will rise by approximately $160 – mortgage rates in the 5 percent range are still very low.
“Because affordability is still high in most areas relative to historical norms, rising rates won't derail the housing recovery,” Lantz said.
Still, she cautions, affordability is starting to become a concern for some booming markets, such as in parts of California. Many metros saw appreciation well above historic norms, sometimes 4 or 5 times their historic appreciation levels. As mortgage rates increase, home prices rise, and a larger housing supply is created by fewer underwater homeowners and more new construction, home values in those areas will see slower improvements.
Despite an easing of lending standards, don’t expect to see the lax lending that led to 7 in 10 people obtaining mortgages in the late 1990s and early 2000s. The homeownership rate will fall below 65 percent for the first time since 1995, according to Zillow, which is a more normal level.
-- By S.E. Slack
*******************************************
We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info.
Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Our primary focus is on homes in the Chicago suburbs, but we have associates who have Rent to Own homes available NATIONWIDE! Whether you're looking for a Rent to Own home in Chicago or Chattanooga, Illinois or Alaska, we can help you find that home! Contact us and let's get you into a nice new home!
Thursday, January 16, 2014
The Benefits of Rent-to-Own
A rent-to-own transaction affords opportunities for both buyers and sellers. The buyer and seller enter into an agreement that enables the buyer to rent the home with the intention of buying it. Typically, a contract is executed including an agreed-upon sale price, although sometimes the sale price will be left to a future independent appraisal of the property.
Rent-to-own contracts usually include a date by which the home will be purchased outright by the renter. Buyers and sellers can benefit from rent-to-own transactions. Depending on the conditions of the contract, either the seller or the buyer may be responsible for routine maintenance, major repairs, insurance and taxes.
Down Payment
One of the benefits of a rent-to-own opportunity for a buyer is that there is a much lower down payment required than in a conventional home purchase. Usually, rent-to-own contracts state that part or all of rent payments go toward a cumulative down payment for the renter, who will use the down payment to obtain a mortgage to buy the home at a later date. This allows the renter to build up a down payment over time using the money they’re already paying as rent, instead of having to scrimp and save extra cash from already stressed budgets.
Taxes and Insurance
Depending on the agreement, the renter may not have to pay taxes or homeowner’s insurance on the home. This must be negotiated when entering into a sale contract. If no taxes are paid, only renter’s insurance is needed to cover the contents of the home, and is less expensive than homeowner’s insurance.
Neighborhoods and Schools
Prior to obtaining a loan for the home, those who rent to own can find out if they are comfortable with the neighborhood and with the schools where their children will attend. If they are not, there are ways to opt out of the contract.
Condition of Property
By living in the home, buyers who rent to own have the advantage of gaining information about the home. In a relatively short amount of time, the renter discovers what condition the house is in and whether expensive repairs to major components of the house including the HVAC, roof and foundation, might be needed.
Fixed Purchase Price
Before signing the rent-to-own contract, a renter works with the seller/landlord to determine a fixed sale price of the home, or if the sale price will be determined at a later date by an independent appraiser. If a fixed sale price is determined, then the price remains the same throughout the time frame of the contract. Contractually, it cannot be increased, and neither can the payments.
Resident Buyer
For sellers, a rent-to-own candidate presents a significant convenience. The seller does not have to advertise for a buyer, enlist the assistance of a real estate professional or wait for someone to make an offer on the property. Instead, the seller has a captive audience -- a resident buyer.
Savings
Contracting with a renter to buy the home without using a real estate agent saves the seller a commission that otherwise would have cost several percentage points. Based on a 5-percent commission, the seller saves $10,000 on a $200,000 home.
Home Values
Regardless of whether home values decline, rent-to-own buyers are obligated to pay sellers the amount agreed to in the rent-to-own contract if they want to purchase the home. This benefits the seller, since declining home values don’t reduce the amount the seller receives in monthly rents. Of course, if the home declines in value, the renter does not have to purchase. They have the option to purchase – which is why rent to own contracts are often called “lease option” – but are not obligated to buy the home.
by Sherry Davis Zander, Demand Media
We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info. Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Rent-to-own contracts usually include a date by which the home will be purchased outright by the renter. Buyers and sellers can benefit from rent-to-own transactions. Depending on the conditions of the contract, either the seller or the buyer may be responsible for routine maintenance, major repairs, insurance and taxes.
Down Payment
One of the benefits of a rent-to-own opportunity for a buyer is that there is a much lower down payment required than in a conventional home purchase. Usually, rent-to-own contracts state that part or all of rent payments go toward a cumulative down payment for the renter, who will use the down payment to obtain a mortgage to buy the home at a later date. This allows the renter to build up a down payment over time using the money they’re already paying as rent, instead of having to scrimp and save extra cash from already stressed budgets.
Taxes and Insurance
Depending on the agreement, the renter may not have to pay taxes or homeowner’s insurance on the home. This must be negotiated when entering into a sale contract. If no taxes are paid, only renter’s insurance is needed to cover the contents of the home, and is less expensive than homeowner’s insurance.
Neighborhoods and Schools
Prior to obtaining a loan for the home, those who rent to own can find out if they are comfortable with the neighborhood and with the schools where their children will attend. If they are not, there are ways to opt out of the contract.
Condition of Property
By living in the home, buyers who rent to own have the advantage of gaining information about the home. In a relatively short amount of time, the renter discovers what condition the house is in and whether expensive repairs to major components of the house including the HVAC, roof and foundation, might be needed.
Fixed Purchase Price
Before signing the rent-to-own contract, a renter works with the seller/landlord to determine a fixed sale price of the home, or if the sale price will be determined at a later date by an independent appraiser. If a fixed sale price is determined, then the price remains the same throughout the time frame of the contract. Contractually, it cannot be increased, and neither can the payments.
Resident Buyer
For sellers, a rent-to-own candidate presents a significant convenience. The seller does not have to advertise for a buyer, enlist the assistance of a real estate professional or wait for someone to make an offer on the property. Instead, the seller has a captive audience -- a resident buyer.
Savings
Contracting with a renter to buy the home without using a real estate agent saves the seller a commission that otherwise would have cost several percentage points. Based on a 5-percent commission, the seller saves $10,000 on a $200,000 home.
Home Values
Regardless of whether home values decline, rent-to-own buyers are obligated to pay sellers the amount agreed to in the rent-to-own contract if they want to purchase the home. This benefits the seller, since declining home values don’t reduce the amount the seller receives in monthly rents. Of course, if the home declines in value, the renter does not have to purchase. They have the option to purchase – which is why rent to own contracts are often called “lease option” – but are not obligated to buy the home.
by Sherry Davis Zander, Demand Media
We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info. Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Tuesday, January 7, 2014
Michael Jordan's house on market for $16 million after failed auction
Michael Jordan has lowered the price on his art deco mansion to $16 million, nearly two years after first trying to sell it for nearly twice that amount.
The house is on seven-plus acres in Highland Park, Ill., about 25 miles north of Chicago.
The former NBA star first put it on the market in March 2012 for $29 million. The price was cut to $21 million nearly a year ago and then failed to sell at auction last month, when nobody made even the $13 million minimum bid.
The house was built in 1995 and has nine bedrooms, 15 baths, a cigar room, and a garage big enough to hold 14 cars. There's a huge home gym.
Katherine Malkin, the listing agent, said the most awesome home feature is the regulation sized basketball court.
"There's nobody -- man, woman or child -- who walks on the court who is not stunned by it," she said. "The lighting, the floor, everything is so beautiful."
With the court and finished lower level of the house included, the compound totals about 56,000 square feet.
Outdoors is a chipping range and putting green, tennis courts, a lily pond and a huge flagstone patio. The front entrance gate sports a giant number 23 -- not for the address but, of course, for Jordan's former number.
Malkin has had the listing for about a year and said there has been lots of interest in it, but few prospects qualify as serious buyers. Would-be purchasers must have enough liquidity to pay cash for the house in full before they can put in offers.
Last year, Jordan bought a house in his native North Carolina, one close to the home court of the Charlotte Bobcats, the NBA team of which he is now the majority owner.
The Illinois property is about three times larger than the new house and stands out in the neighborhood for its size and price.
"He was a very successful and sought-after personality and he built a compound to fit his lifestyle," said Malkin.
She said he has redone parts of the property over the years and it's in "perfect" condition. "Nobody kept a house better than he did," she said.
-- CNNMoney
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You probably can't buy Michael Jordan's home through Rent to Own, but I'll contact the listing agent and ask, if you can verify your ability to puchase the home first. ;)
We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info.
Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!
Our primary focus is on homes in the Chicago suburbs, but we have associates who have Rent to Own homes available NATIONWIDE! Whether you're looking for a Rent to Own home in Chicago or Chattanooga, Illinois or Alaska, we can help you find that home! Contact us and let's get you into a nice new home!
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