My New Blog

®Great News from the housing market!

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and an $8000.00 first-time homebuyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005.  Additionally, the number of foreclosures comprising the resale market has dropped.  Those are both very good pieces of news. (There is a link to the entire article from NAR at the bottom of this page)

It appears that the residential real estate market may have hit a bottom...at least for the foreseeable future.  The question becomes:  What does this news mean for people like you who have been thinking about buying or Lease-Purchasing a home?

I am not an expert on predicting the long term movement of the real estate market. Really, nobody is.  But based on the empirical data I’m seeing, I might be inclined to at least begin investigating a few things...

1st- A mortgage. Find out if you qualify for one and for how much. There are still 100% financing options out there with good interest rates. If you dont qualify for a mortgage right now, dont give up. Call us about our Lease-Purchase Programs. We can still get you a house of your own.

2nd- Talk to a licensed Realtor in your area about homes that you can reasonably afford. If you dont really know a Realtor®...call us, we're licensed in N.C. & S.C. and will answer your questions honestly.

3rd- Learn as much as you can about the NEW $8000.00 1st time homebuyer tax credit. ( go to: http://www.brianhagenrealtor.com/$8000.00firsttimehomebuyertaxcredit ) for all the info you will need to know.)

  In late 2007-2008 most people were not completely confident in their home purchases - simply because last month’s good deal might of became this month’s overpriced property. But, it appears we’re rapidly heading towards a point where this is no longer true.

Case study: Last week, a Buyer Client of mine wanted to buy a 3 bedroom, 2 bath home in the country with an acre or more of land in northern Union County. We looked at 8-10 houses and he chose 1 to make an offer on. After a bit of negotiating we got the house under contract for $15,000.00 LESS than the current owner paid for it in 2006! AND, the current owner is paying for all my Clients closing costs (Another $5100.00) The point is that there are GREAT DEALS on homes right now and when combined with the 1st time homebuyer tax credit of (up to) $8000.00 I can't think of a better time to buy a home in the last 10 years.

Here's the link to the NAR housing statistics article:

http://www.realtor.org/press_room/news_releases/2009/06/ehs_continue

You can do it, we can help.

Brian A. Hagen

Realtor®/Broker N.C./S.C.

Managing Partner

Lease Purchase Charlotte.com

World Properties International

980-522-2405

Is now the BEST time to Lease-Purchase a home? Answer: Probably. (actually the answer is definitely, Yes.)

Really a better question is...Is now the best time to purchase ANY home? Answer: Maayybeee....Probably...

And the million dollar question everyone wants to know is... when will the Real Estate market hit bottom in the Charlotte area and home values begin to rise again...right? (At lease that's the 1 question I hear a dozen times a day :-)

Below is an article from Lawrence Yun, Chief Economist with NAR that may just answer that million dollar question. If the numbers of homes being bought and sold over the last 2 months are indeed increasing, and the increasing number of mortgage applications are ANY indication (and they are the leading indicators, just FYI) then the answer to the million dollar question is a resounding YES! Right about now would be the bottom of the Real Estate market and you should go buy a home sometime between today and the next 6 months.

When you contract to Lease-Purchase a home with WPI/Lease Purchase Charlotte.com, you lock in the purchase price UPFRONT (at today's LOW price). Then, with our help, take the time you need to sort through mortgage qualification issues and close on the home in about a year or so.

The "big idea" is that even if you can't get a mortgage right now, you can still capitalize on historically LOW LOW LOW home prices by locking in the price at the bottom of this down market via a Lease-Purchase.

Read below to find out the CURRENT (and very encouraging) home sales statistics.

ARTICLE FROM NAR/PRESS RELEASE:

Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price² for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.

An NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

Happy Friday everyone,

I subscribe to a lot of Real Estate articles, newsletters, statistical data etc. Really anything that is relevant to Real Estate buying, selling or investing in all it's forms. This morning I was reading through a bit of info that I received from a well known Investor from the N/W. (Ron Meade, The Probate Guy)

He used this info-story in a different context BUT, the point of the story is EXACTLY why a well structured Lease-Purchase arrangement with today's highly motivated home Sellers is such a WONDERFUL approach to purchasing a home in today's Real Estate and lending environment! Powerful stuff and makes perfect sense.    

Ron's short story: 

A public speaker at a seminar, asking his audiance... 
 
"If you were going to open a restaurant, what is the single
greatest factor that will affect your chances of success?
One audience member said your location.
Another said great food.
A third said a well trained and friendly staff.

Unfortunately none of these was the answer the presenter was
looking for.
His answer was...

"A hungry crowd!"

And I guess he was right to a degree.

A famished crowd will trump all the other answers. .......at least for
a while." (end story)

So how does this translate into YOU getting a good Lease-Purchase deal on your next home?

In today's Real Estate Market without a doubt there are A LOT of STARVING SELLERS out there! It's very difficult for most people to get a mortgage right now and foreclosures are putting a lot of downward pressure on re-sale home values.  All of this makes for a starved market for home Sellers and I can speak from experience that most of them will be happy to see you coming with a Lease-Purchase offer in hand. It happens....and it happens A LOT around here!

Give us a call or send us an e-mail to schedule an initial consultation meeting at one of our 3 office locations in Charlotte. We're happy to answer any questions you might have and we're here to help.

Have a good weekend everyone!

Brian Hagen

Managing Partner

Lease Purchase Charlotte 

Great News for all those considering a Lease-Purchase or Rent-To-Own home! Yesterday’s stats from the National Association of Realtors show a nationwide increase in home sales from February of 2.1% average!

What does that mean for you...the Lease-Purchase Buyer? It means 3 really GREAT things...

1^st- Through our proprietary methods our Lease-Purchase Buyer Clients lock in the purchase price of the home UP FRONT. The result and advantage to you is that you get today’s low price on the home and get to keep any equity gained during your lease term.

2^nd- If you can get in a position to get a mortgage b4 12-1-2009 you will receive up to an $8000.00 tax CREDIT on next year’s tax return. (That credit will more than cover what you will need as your initial Lease-Purchase deposit)

3^rd- We identify what is preventing our Clients from getting a mortgage and then assist them in correcting it in the fastest amount of time humanly possible! The sooner you get started in our State Licensed Lease-Purchase Program the faster you can take advantage of the upward market shift!

Our Real Estate market is showing the initial signs of recovery, (2% increase in sales in February nationwide) contracting on a property now via our proprietary and proven Lease-Purchase methods, locking in your purchase NOW at the low point in the market, and keeping any appreciated equity is the best move any perspective homebuyer can make in 2009.

Click the link to read the report from the National Association Of Realtors, the numbers speak for themselves.

http://www.realtor.org/press_room/news_releases/2009/04/phs_gain

Can The Seller Pay For The Buyer's Closing Costs? 

After making the initial Down Payment to secure a Lease Purchase home many Lease Purchase and Rent To Own Buyers are short the cash they need for closing costs to close on the property when the time comes. One way to overcome this cash shortage is for the Seller to pay a large portion of the Buyer's closing costs at the closing table. How much the Seller is allowed to contribute depends on the type of mortgage loan you will get in 6-24 months.

If you watch the nightly news you already know that the Banking Industry is going through a time of "reform". The rules and amounts of "Seller Concessions" vary a bit depending on the type of loan you will be getting. It is commonplace in today's Real Estate Market however for the Seller to pay for a large portion of a Buyer's closing costs, and in many instances almost all of the Buyers closing costs. Our state licensed Mortgage Brokers take into account each individual Client's needs then reccommend the loan program(s) that will be the best solution and meet the Client's needs.

Asking The Seller To Pay For Closing Costs

The seller's willingness to contribute to a Buyer's closing costs is often driven by market conditions and the way in which the request is made to the Seller.

As your representation, we will help you prepare an offer that balances the purchase price and your request for closing cost assistance with the dynamics of the current marketplace. For instance, in a Seller's market we may increase the offered purchase price to offset the request for closing cost assistance. Conversely, in a Buyer's market we may prepare an offer that asks for a slightly less than market value purchase price plus Seller paid closing costs.

Remember - When you ask the Seller to pay a portion or all of your closing costs, in essence you are financing the closing costs. This is because the Seller's contribution is typically offset by a higher purchase price. And it is this higher purchase price that is financed with your mortgage loan.

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

Option Fee:  A sum of money from the Tenant/Buyer to be used as a non refundable deposit to secure the property and validate a Lease-Option agreement. The Option Fee is traditionally fully 100% credited back to the Buyer towards closing costs or off the purchase price if the Buyer closes escrow on the home. In case the Tenant/Buyer chooses not to purchase the property the Option Fee is forfeited to the Seller as liquidated damages unless other arrangements are stipiulated in the contract. 

LIQUIDATED DAMAGES - When the parties to a contract agree to the payment of a certain sum as a fixed and agreed upon satisfaction for not doing certain things particularly mentioned in the agreement, the sum is called liquidated damages.

As part of the new economic stimulus plan as passed on February 13, 2009, Congress has created a new federal tax credit to provide an incentive for first-time home buyers. This legislation is a further step to help stabilize the current housing market and make home ownership more attainable for many Americans. We've been getting a lot of questions about how this might pertain to Lease-Purchase and Rent to Own arrangements.

Although anyone currently in the Lease term of their Lease-Purchase arrangement can not receive this tax credit, if a Lease Purchase Tenant/Buyer "closes" on the home before Dec. 2nd 2009 they are eligible for the federal tax credit up to $8000.00 just like a traditional Buyer!

Frequently Asked Questions

A tax credit of $8,000 will be available for first-time homebuyers who purchase a principal residence through December 1, 2009. (Before Dec.2nd, 2009)

The provision is retroactive to purchases made on or after January 1, 2009.

This new tax credit replaces the previous $7,500 first-time home buyer tax credit created by the Housing and Economic Recovery Act of 2008.

Who qualifies for the “new” tax credit?

First-time buyers purchasing a principal residence are eligible. The credit is subject to certain income restrictions.

Are there income restrictions?

Yes. The income restriction is based on the tax filing status of the purchaser’s tax return. Individuals with a “single” Form 1040 filing status are eligible for the credit if their adjusted gross income is no more than $75,000. Individuals who file a joint return may have income of no more than $150,000.

Is the amount of the credit tied to the price of the home?

Yes. The credit is for 10 percent of the cost of the home, up to a limit of $8,000.

What’s the definition of “principal residence?”

Generally, a principal residence is the home where an individual spends most of his/her time. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of dwelling.

Are there restrictions on the location of the property?

Yes. Eligible property must be located in the United States. Property outside the U.S. is not eligible for the credit.

What is different from the prior credit?

Unlike the prior credit (which was structured like a 15-year interest-free loan), it is a true tax credit because the money is not required to be paid back (unless the home is sold within 3 years).

How do I apply for the credit?

There is no application or approval process. Eligible purchasers will claim the credit on the appropriate IRS Form 1040 tax return and/or on any special forms the IRS might devise.

Can I use the credit amount as part of my down payment?

No. Presently, there is no mechanism available for claiming the credit any earlier than the 2009 tax return that will be filed in 2010. Congress tried to devise a mechanism that would allow pre-funding of the credit, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

Is there any way to get cash flow benefits before I file my 2009 tax return?

Any first-time home buyers who believe they would be eligible for all or part of the credit would be allowed to make adjustments to their income tax withholding (through their employers) or to their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases, the take-home pay would increase.

Source: Potomac Partners, Washington D.C.