RENT-TO-OWN: HOW YOU CAN MAKE IT POSSIBLE

Looking for the alternative way to purchase a home than rent-to-own or lease-to-own may be what you are looking for but beware of the pitfalls along the road to ownership.

Put simply rent-to-own is where you rent a home for a certain amount of time, with the option to buy it before the lease expires.  A rent-to-own agreement has two parts: a standard lease agreement and an option to buy.

Here is how it works:

1) You pay the seller a one-time fee, a nonrefundable upfront fee, called the option fee.  The fee is often negotiable and can range between 1% to 5% of the purchase price.

2) The rent-to-own agreements should specify when and how the home price is determined and you and the seller will agree on the purchase price when the contract is signed.  As the buyer, you should try to "lock in" the purchase price, especially if your area market housing prices are trending upward.

3) Determine what portion of the rent you pay will be credited towards the purchase of the home.  In this situation rent will be slightly higher than the going rated to make up for the rent credit you receive, so be sure what you are getting for the premium you are paying.

4) Home maintenance and the cost of repairs may be your responsibility during the rent-to-own agreement.  The seller is ultimately responsible for taxes, insurance, and homeowner association fees.  You should have a separate renter's insurance policy to cover losses to personal property and provide liability coverage in the event someone is injured while in the home.

5) When the lease agreement expires, and you still want to buy the property you will need to obtain a mortgage to finance the purchase of the home.  Should you opt out and not buy the property, when the lease expires you will have to move out of the home, just as if you were renting another property.  You will forfeit any money paid up to that point, including the option money and any rent credit earned.  You will no longer be obligated to continue renting or purchasing the home.

Note: Before entering any rent-to-own agreement, have the contents of the agreement reviewed by your attorney before signing.  Be certain you understand all the conditions of the rent-to-own agreement - both yours and the seller.  

WHERE DOES THE HOUSING MARKET GO FROM HERE?

The first six months of 2020 has taken the housing market into some uncharted waters and has seen an uptick in the use of technology to provide solutions to social distancing.  The question remains where does the housing market go from here and what will the market look like at the close of the year?

Five significant data points have emerged during these first six months: 1) mortgage rates are in search of a bottom; 2) home prices moving towards record highs; 3) home buyers looking for the "deal"; 4) a shrinking inventory of homes for sale; and 5) homeowners weighing their options - sell or refinance.

The corona virus has brought a new dimension to the housing market as more regions of the country are experiencing new guidelines for social distancing and more families are confronted with re-purposing their homes.  Rooms are now multi-functional serving as office space, home gyms, and school classrooms.  In addition, regional unemployment remains a concern for first-time buyers and those with secured mortgages as they look for ways to meet these financial obligations.

Three greatest concerns moving forward in the second half of 2020 are:
 1. The health crisis caused by corona virus
 2. The shortage of houses and the need to build more homes to meet the growing demand
 3. The expiring of the emergency fiscal policies from the CARES Act at the end of July and its impact on both the rental and owner-occupied market.

The turbulence created by this virus and its far- reaching tentacles into the very fiber of our society offers both challenges and opportunities.  We are living in what can be best describes as "interesting times."  When the housing market fully emerges from both the challenges and opportunities of these days, we need to be at the forefront leading the way into a new housing era. 

BEFORE YOU MOVE ....READ THIS!

This week's blog provides critical information you as a "mover" need to know before packing the first box.  Whether you are a buyer, seller, or renter, you will want to become familiar with the contents of a free booklet entitled Your Rights and Responsibilities When You Move.  It is furnished by your moving company as required by Federal law.  The contents of this booklet will answer many of your questions and concerns about your pending move. 

Apart from the booklet, let us take a cursory look at three significant areas you need to aware in preparation for your move.

1. Plan before you move.  Obtaining the booklet mentioned above should be Priority One.  Solicit recommendations from neighbors regarding moving companies they may have used in the past; then check with the Better Business Bureau regarding the movers.  When interviewing movers ask the hard questions like: What are the mover's responsibilities if damages are incurred during the move? Do they have a dispute settlement program? Are they an interstate mover registered with the USDOT?  Find out how and when pickup and delivery of your household goods will occur. How can you contact the mover before, during and after the move?  Above all - obtain adequate insurance for your belongings.

2. The day of the move.  Be present to answer questions and give directions to the movers.  Verify the mover's inventory of your household goods and resolve any questions about the condition of items being moved. Carefully read the information on the estimate, order for service, bill of lading, inventory, and all other completed documents before you sign them. Keep a copy of all documents until your goods are delivered, the charges paid, and any claims settled. Give the driver directions to your new house and inform the driver where you can be reached during the move.

3. Delivery day.  Be present to answer any questions and give directions.  Pay the driver, according to the terms of the contract before your goods are unloaded. Supervise the unloading and unpacking of your household items and note on the inventory list any damaged items before you sign any documents.

Whether you are moving cross-town, or cross-country be fully aware of your rights and responsibilities when you move.  Be fully aware of the mover's responsibilities for any damages that may have occurred during transit or unloading.  Have the contact number for the moving company and the name of the agent you worked with to set up the move.  Being prepared can save a lot of heartache and stress before, during and after the move.

LET'S MOVE TO FLORIDA!

For many, Florida has become a preferred destination.  There is the warmer weather, easier lifestyle, abundance of activities including theme parks, fishing, golfing, boating, and strolling on endless white beaches.  But before you pack your bags, sell the house, and load up the car to move let's take a few moments to explore other attractive points that draw people to the Sunshine State.

1. You are not the only one moving to Florida. 
  
Florida boasts 11 of the most populous metros in the U.S.  9 of them are among the 25 fastest growing in the nation.  Each year the migration to Florida stretches the population, now topping over 21 million.

2. Variety of places to choose.

Many people are attracted to Miami, which is not only a major international business zone, but is the 8th most populated metro in the U.S.  If the robust lifestyle of Miami and South Florida is not your ideal, then perhaps the panhandle (Pensacola to Jacksonville) would be more to your liking.  Key cities like Pensacola, Tallahassee and Jacksonville offer the small city vibe.  Central Florida is the epicenter for major amusement parks like Walt Disney World, Universal Studios, Sea World, and the Space Center.  Orlando is a gateway to Central Florida. Just a little further north in Ocala you will find "horse country" and Silver Springs State Park.

3. Other key factors that draw people to Florida

• The cost of living varies depending upon where you live
• The state offers new residents a diverse lifestyle
• The state attracts a significant number of retirees
• New home / apartment construction is booming
• No state income tax 

Not certain that you want to settle in Florida, then let me suggest you spend a little time in the state exploring its treasures.  You will find what you are looking for in Florida!