My New Blog

Every day we at http://www.leasepurchasecharlotte.com talk to dozens of people from the Greater Charlotte area and a few more that are relocating to the Charlotte area soon who want to Lease-Purchase their next home in our fine city. Invariably there are at least a couple people (daily) that we speak to that are currently in a “Rent To Own or Lease-Purchase” arrangement that is absolutely falling apart or already has. All their hard earned money…gone.

Here’s the scary part... 99 times out of 100 the truth is that these folks never even had a snowball’s chance in H-LL of EVER closing on the home! (Through no fault of their own). What’s worse is that almost all of these planned disasters could have been avoided and the Tenant/Buyers could have saved themselves 10’s of thousands of dollars in the process AND closed on the home much quicker!

HOW?

For starters…a few of the “DON’T’s” (Do not do these things under any circumstances in your Lease-Purchase/Rent To Own arrangements. There are dozens of things to watch out for but these are some of the more common ones)

· DO NOT: Have an investor buy the property for you…ever. (This one is at the top of the list for a reason…Disclaimer: we’re not saying all real estate investors are bad here…Okay.) By inserting an investor in your transaction you almost assuredly will NEVER close on the home even if you do qualify for a mortgage down the road sometime! Investors will buy a property at or just below market value for you THEN ADD 15%-30% to the “fair market price” they paid for it. The “marked up” price is what they sell to you for. In a NORMAL real estate market houses appreciate at about 3%-5% per year. (In today’s market less than that) When you get in a position to get a mortgage say in about…1-3 years, the bank giving you a mortgage is going to order an appraisal and because of the investors “Mark Up” the property WILL NOT APPRAISE FOR YOUR CONTRACTED PRICE…NOT EVEN CLOSE! The investor will tell you that your only 2 options are to come up with the difference or move out… leaving all your down payment and rent credits behind.

· DO NOT: Enter into a Lease-Purchase/Rent To Own transaction until you know exactly how much of a mortgage you will qualify for 1-2 years from now. It is absolutely critical to KNOW exactly how much house you should be shopping for, how much of a mortgage you will qualify for prior to contracting on a home, what exactly is preventing you from getting a mortgage and how long it will take to “fix” your credit standing. (We provide this service to all of our clients for FREE if you have a current credit report showing all 3 major credit reporting bureaus.) You don’t want to find out later that you don’t qualify for enough of a mortgage to cover the contract price of the home. Then you would be stuck and couldn’t close on the home unless you can bring the difference to closing…which could be anywhere from a few thousand to 10’s of thousands of dollars.

· DO NOT: Enter into a Lease-Purchase/Rent To Own arrangement without State Licensed Professional Representation (Real Estate Agent, REALTOR) that specializes in Lease-Purchase/Rent To Own transactions…ever. It’s not a coincidence that over 96% of ALL Real Estate that is bought and sold every year has a state licensed Real Estate Agent/REALTOR involved. Real Estate Agents can provide mountains of relevant information and professional services that will keep you out of hot water and make sure your interests are being protected. Any reputable, legitimate, state licensed Real Estate Agent will represent Buyers (and in the case of our Real Estate Firm) Tenant/Buyers without cost to their Buyer Client. Always ask the person who is structuring the transaction for you if they have a real estate license and what firm they work for.

· DO NOT: Sign any Real Estate contract that was not drafted by a Real Estate Attorney that is practicing law in the state you live. (This is another great reason to only work with state licensed professionals) We have seen some utterly laughable so called “contracts” floating around out there. Many of these instruments do not even meet the legal definition of a contract. (Scary) It is impossible by any stretch of imagination that a contract that some “Huckster” bought online or got from from one of those get rich quick “business in a box”, late night infomercial real estate Gurus will really cover all your needs and specify in a legal and binding way all of the terms, conditions and performance dates necessary to protect you and your interests in your transaction according to the laws of your specific state. It is a virtual certainty your Lease-Purchase/Rent To Own transaction will fail based on just this one piece of the puzzle alone unless a legal contract is used.

More to come next Friday.

http://www.leasepurchasecharlotte.com