Rent To Own - Frequently Asked Questions

Here are some answers to the most common questions we receive about rent to own.

How many year contract do I have to sign to rent?
Rent to own contracts usually range from 1 - 3 years, but occasionally they are shorter or longer depending on the tenant's situation.

When will the buying process begin?
While you are renting to own, you should meet with a mortgage broker to find out what you would need to do to qualify for a loan. (For instance, improve your credit score, save more for down payment, pay off debt, stay at your job longer, get a salary increase, finish school, sign up for credit repair or credit counseling, etc.) Once the mortgage broker says you are pre-approved, then you start the formal process to get a loan to buy the home.

How much down payment do I need?
Rent to own contracts usually require the tenant-buyer to pay 3-5% of the purchase price before moving in. For a $100,000 home, you would need about $4000. For a $200,000 home, you would need about $8000.

Are there any closing cost?
You would only pay closing costs if your loan is approved and you purchase the house and become the homeowner with the title in your name. The bank providing a loan would work with you to determine those closing costs.

How much monthly payment do I have pay?
Rent to own homes generally range from about $1200 to $2500 per month depending on the size and condition of the home, but occasionally we have homes available for less or for more than those amounts.

Who is responsible if something goes wrong?
During the rent to own process, tenant-buyers usually handle the costs of minor repairs and maintenance as they work to become the owner of the home, and the landlord-seller will continue to handle larger capitol improvement costs -- such as a new furnace or new roof.

What if I don't want to buy by the end of my rental agreement?
Rent to own is also called Lease-Option because you have the option to purchase but you do not have to buy the home! If you decide to move out at the end of the rental agreement, you are free to do so. You will not receive any refund of any monies paid, and you will be responsible for any outstanding charges for rent, late fees, damages, etc. Sometimes people choose rent-to-own to "try out" a neighborhood, and then decide to buy somewhere else when the lease ends.

Illinois Supreme Court Rolls Out New Foreclosure Rules

On Feb. 22, the Illinois Supreme Court announced new rules establishing a uniform protocol when it comes to the foreclosure process. Among the rules outlined in the court's news release:

• Lenders must provide homeowners with information about the process and consequences of foreclosure.
• Lenders must seek modifications with eligible homeowners before completing a foreclosure.
• Improved legal notices to owners are required throughout the process and before a foreclosure sale.

Illinois Circuit Courts with mediation programs will be required to provide resources for HUD-certified consultation, free legal help and language interpretive services to those eligible and in need of them. Find media coverage of the new rules in the Chicago Tribune article, "New rules to govern Illinois foreclosures," and in the State Journal-Register, "Illinois Supreme Court issues rules on foreclosures."

Just Bought His First House!

Adam and Diane from Happy Home Solutions were so excited that our client Tyree was so excited about buying his first house, we thought we'd show you!

Watch this short 20-second video clip and you'll see what we mean: Tyree Just Bought His First House!

Neither Tyree's mother or father ever owned their own home -- they were renters their entire lives and just paid off their landlords' mortgage instead of their own.

That's a fatal financial flaw made by far too many Americans.

Don't let it happen to you -- buy a house as soon as you can and start realizing the many benefits of home ownership, including:

* Pride of Ownership

* Security

* The ability to make changes you want to the home without having to ask your landlord's permission

* Appreciation in the value of the home (yes, appreciation is back!)

* Historically low interest rates

* Tax advantages like rich people get even richer off, as in, you might not have to pay any more taxes because you can write off so many expenses from home ownership!

* Get all or most of your withholding tax back too! Once you own a home, you can probably just stop letting your employer even take them out of your paycheck to begin with!

If you can't qualify for a traditional mortgage, you can probably qualify for Rent to Own and possibly even seller financing.

Call Adam today at 630-697-4500 to find out how you can become a homeowner!

Visit us on the web at MyHappyHomeSolutions.com

Tips for your Home Inspection

An inspection may seem like an inconvenient cost when buying a home, but in the long run it can save you a lot of money and heartache.

An inspector, if they do their job well, will make you aware of issues with your prospective home, such as needed repairs or structural damage. If the inspector finds problems with the home, you may decide you can overlook them, you may try to negotiate the price of the home in anticipation of costs associated with the problems, or you may decide the house is not for you and keep looking. The point is that you are aware of the problems before they become yours to solve.
 
Finding an Inspector

Now that you know why you need a home inspection, how do you find a good home inspector?
 
Hire Your Own:

A seller may offer up an inspection report. While they may have the best intentions, it is always better to hire an individual you've vetted who is working for you.
 
Certification:

Ask your inspector if they hold any certifications or memberships that qualify them as a home inspector. An inspector can be accredited through the American Society of Home Inspectors. In addition, they may be a member of the National Association of Certified Home Inspectors.
 
Experience:

Ask how long they have been inspecting homes and request they provide references. In addition, ask if home inspection is their primary occupation.
 
Comprehensiveness:

What does the inspector cover in their inspection report? They should be able to provide you with a list. In addition, ask how long the inspector thinks the inspection should take. A normal inspection should take as long as 2 to 3 hours.
 
Errors and Omissions Insurance:

Even the best inspectors make mistakes, so ask if your inspector carries errors and omissions coverage.
 
The Inspection

Once you are ready for the inspection, make sure you are present when it occurs. Ask questions and pay attention to comments the inspector makes as you walk through the home. While a good inspector should have a camera, you may also want to bring your own to keep record and help you remember where the inspector found problems.
 
Finally, make sure you thoroughly read the inspection report. It may elaborate on problems the inspector pointed out during the inspection, or even include issues the inspector failed to mention during the walk through.

(reprinted from W.J. Bradley's Insight)

Illinois' Right to Redemption During Foreclosure

On behalf of Sulaiman Law Group, LTD posted on November 3, 2011

Illinois is still suffering from the worst housing market crisis in history; in fact, areas of Chicago are still experiencing a record number of foreclosures. Many homeowners feel helpless and trapped as they struggle to make mortgage payments - while banks seem as if they can't process foreclosures fast enough. However, not all is lost for Illinois homeowners, as they possess something known as the "right to redemption." This ability to redeem real estate subject to foreclosure can even be exercised after a bank has obtained a foreclosure judgment against them.

Right to Redemption

Under Illinois' statutory right of redemption, only the owner can exercise the right to redeem. Moreover, the amount required to redeem can include not only the principal and interest owed on a mortgage, but also the costs associated with collection, attorney's fee, court costs and additional per diem interest.

Unfortunately for homeowners, the right to redemption cannot be enforced following the judicial sale of the property. Consequently, under Illinois law the right of redemption can generally be exercised during the following periods:

• When the property subject to foreclosure is residential real estate, the borrower may redeem the property within seven months of being served with summons or by publication, or within three months after the date of entry of judgment of foreclosure, whichever is later.
• When the property subject to foreclosure is NOT residential real estate, the borrower may redeem the property within six months of being served with summons or by publication, or within three months after the date of entry of judgment of foreclosure, whichever is later.

However, the redemption period can be shortened in the following circumstances:

• When the value of the real estate on the date of judgment is less than 90 percent of the amount required to redeem AND the lender waives any and all rights to a deficiency judgment against the borrower, the redemption period will be shortened to 60 days after the date of judgment of foreclosure or the expiration of any reinstatement period, whichever is later.
• When the court deems a property abandoned, the redemption period expires 30 days after the date of judgment for foreclosure.

Under Illinois law, this right of redemption is guaranteed for residential properties - if fact, statutory language states that any attempt to waive this right for residential properties is void. However, this same restriction is not available for commercial properties, and often commercial mortgages contain an expressed provision that does waive redemption rights.

A property owner - regardless of whether they own residential or commercial real estate - needs to be vigilant in protecting their property rights during foreclosure proceedings. An experienced foreclosure attorney can help navigate Illinois' complex foreclosure laws and advise you of your rights and options.

Finding the Perfect Neighborhood: As Important as Finding the Perfect Home

The neighborhood you live in can have just as much impact on your life as the house you live in. When you decide to start looking for a new home, first create a profile of your ideal neighborhood. Here are some factors to consider.

Children

Do you have children or are you planning to have them in the future? If children are a factor, be sure to learn about the schools in your neighborhood. Even if you don't have children, buying a home in a neighborhood with good schools and a child-friendly atmosphere will give your home price a boost.


Location

The old real estate adage "location, location, location" is important for several reasons.

Do you want to be able to walk or ride your bike to work? Or do you not mind commuting further to be able to live in an area where you can escape from the hustle and bustle?

Do you want to be able to walk to restaurants and shops? Or do you not mind having to drive to go out or go shopping?

Access to public transportation or freeways is important to consider when choosing a neighborhood that accommodates your lifestyle preferences.

Type of Home

Do you want a large house with a yard to accommodate guests and children? Or do you want a condo where most maintenance is taken care of for you (and you don't mind paying HOA fees)? Drive through the neighborhood and take note of the patterns in the layout of the homes, for example, bungalow, ranch, Tudor or Victorian. Does the type of home offer the amount of space and storage you will need?

Do you like the character of old homes and neighborhoods, or do you want a brand new home? An old home can have more charm, but may also require more maintenance. In addition to the age of the home, investigating the demographics of the neighborhood may also offer insight about the average age of your neighbors. Your new community may end up better fitting your lifestyle if you know you'll be surrounded by families of similar ages to your own.

Noise

Do you not mind noise or do you want peace and quiet? If you want a lower-key neighborhood, avoid living near a college or an area with a hopping nightlife. When visiting neighborhoods you are interested in, take note of the amount of traffic and how close it might be to a major thoroughfare; both factors would impact volume levels, even during non-peak traffic hours.

Safety

In most cities, safety is also a factor. Evaluate whether a transitional neighborhood where you can get more bang for your buck is an option for you, or if a secure, established community is more your style. Local police departments will be able to provide you with information on recent crime rates in the area you are considering.

Economy

Find out how long homes are on the market and if sellers are forced to reduce their price to find a buyer. Also look around to make sure the retail isn't struggling. If you see abandoned buildings and "for rent" signs, you may want to keep looking. On the other hand, if you think the neighborhood is about to turn around, you may be able to get a great deal.

Hit the Pavement

Once you've identified several neighborhoods that are up to your standards, go investigate them. Hang out at the coffee shop or knock on some doors, and ask current residents why they love where they live. Walk around the neighborhood during the day to see what people are up to. Similarly, be sure to check out the neighborhood at night, and make sure you feel safe and secure about where you are.

Finally, if there is a neighborhood association, check if there are any construction restrictions or other similar guidelines that could hinder future plans for your home.


(reprinted from W.J. Bradley's Insight)

Chicago-area home prices post first gain in 50 months

Source: chicagotribune.com
By Mary Ellen Podmolik Tribune staff reporter
8:28 a.m. CDT, June 21, 2012

It took 50 months to happen, but the median selling price of a home in the Chicago area posted a year-over-year gain in May.

With the city of Chicago, the median sales price increased even more, the Illinois Association of Realtors reported Thursday.

It was the smallest of median price gains for the nine-county Chicago area - $170,000 last month compared with $169,900 in May 2011- but the last time prices rose on a year-over-year basis was in March 2008.

"One event does not a trend make, but the numbers have been going in the right direction to this point," said Jon Broadbooks, a spokesman for the association.

That price increase accompanied a 25.3 percent increase in sales volume. Last month, 8,276 homes were sold in the Chicago area, compared with 6,605 homes in May 2011.

Within the city of Chicago, May home sales totaled 2,037, rising 19.6 percent from May. The median home price within the city, of $203,000, was up 6.8 percent from last year's $190,000.

The gain within the city came from sales of single-family homes, not condos. A 8.9 percent uptick year-over-year in the number of single-family homes sold was accompanied by a 11.9 percent increase in the median selling price, to $151,000.

While the city's condo market saw sales rise 26.8 percent, to 1,290 units sold during the month, the median price of $249,400 was a 0.2 percent decline from May 2011.

Home sales volume was expected to rise locally heading into summer. May closings reflect homes that went under contract two to three months ago, and area real estate agents were busy with showings in February and March, in part thanks to a mild winter.

"For the first time since the recession began, median house prices are increasing on an annual basis and are forecast to continue this trend through the end of the summer," said Geoffrey J.D. Hewings, director of University of Illinois' regional economics applications laboratory, in a statement.

"The weaker than expected job figures for the last few months appear not to have affected the housing market; inventories are down, sales volumes are up and the pending sales index is at its highest point since 2008."