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Lease Options, popular in the 70’s and 80’s, are resurfacing  as financing options in the 2008 housing market.    For those unfamiliar with lease options, I will outline what is a lease purchase or lease with the option to purchase?  What are the benefits and drawbacks?  What are the things to watch for? 

NOTE:  Please keep in mind that the information is an overview and is not meant to be construed as legal advise.  Buyers and Sellers should always consult an attorney before signing any legally binding document.

ABC’s of a Lease with an Option to Purchase:

• The buyer pays the seller an option fee for the right to purchase the property on or before a future date.  The amount of the option fee may be substantial or as low as $1.00.
• The purchase price can be fixed at the time of contract or set at the fair market value at the time the option is exercised. (Note:  Most buyers will lock in the future price when the option contract is signed.)
• During the Lease Period, the buyer leases the property from the seller for an agreed upon rental amount.
• The term of the lease option is negotiable, but the term is usually from 1-3 years.
• The Option Fee is generally non-refundable.
• If the buyer does not exercise the option to purchase the property at the end of the lease, the option expires and the seller keeps the option fee.
• Usually, a portion of the rental amount is applied to the future purchase.  (Example:  If the lease is $1200 per month, the seller will apply a credit of $200 per month toward the future purchase price or down payment.)
• The buyer can not assign the lease option without seller approval.
• The Buyer is not obligated to buy the property.

ABC’s of a Lease Purchase: 

• Includes all the standard terms above with the following exceptions.
• The option money is non-refundable and does not apply toward the purchase price or down payment.
• No one else can purchase the property unless the buyer defaults or the option period expires.
• The buyer is responsible for maintenance, all expenses for upkeep, taxes and insurance.
• The buyer is obligated to buy the property.
• The Seller can sue for specific performance in the case of buyer default on a Lease Purchase.

Benefits for Sellers and or Buyers:

• Lease Purchases or Lease Options are usually offered by distressed homeowners or builders. 
• The Seller can often get a higher price than they would with a normal sale.
• The Seller is able to sell the home in a slow market.  Think about it, if the property was easy to sell, the owner would sell it out right for the cash.
• The Seller benefits from locking in today’s prices and gets relief from paying the monthly mortgage.
• In theory, the Seller gets a renter that keeps up the property.  Since the renter intends to purchase the property, they should take care of the home, as if it were theirs.
• The Buyer builds equity through a forced savings plan, as a portion of rent is credited to him, even though the lease payments may exceed market rents. 
• The Buyer hopes to build equity, if the property appreciates during the option period.
• Buyers usually make a small down payment, with little to no qualification, which makes lease purchase a good way to ease into home ownership.
• If the Buyer defaults, the Seller does not refund any portion of the lease payments or the option fee. 

25 YEARS OF REAL LIFE EXPERIENCE:

I have written dozens of Lease Purchase or Lease Option Contracts during the 1980’s real estate crash in Texas.  During that entire period, I never saw one person actually  purchase the property they had an option on. 

The primary reason is often the reason they try to buy with a lease option in the first place…they can’t qualify for a loan.  The second reason for default was that prices continued to fall during the option period and they could buy another home for less money.   The third reason was that the property was in poor condition when they leased it and things became worse with the passing of time. 

If a Seller can not sell, then a lease option or lease purchase may be a sales tool to consider.  They generally generate more monthly cash-flow than renting alone and an option fee is the sellers to keep.  

But note, history proves by a large margin that the tenant will not become the owner, unless their credit situation has improved and the property values increase above the option price.

Bottom Line:  Chances are that 95% of the time, the Seller will get their house back at the end of the option period.

Most home buyers believe they focus on the interior features of houses more than the landscape, but the truth is, that buyers will not get out of their car if the front landscape lacks interest and upkeep.  The landscape should arouse the buyer’s interest and lure them inside to view the interior.

To get the highest return on your landscape dollar, utilize the principles found in Landscape Design Psychology.  Landscape Psychology is based upon scientific research into the effects that the landscape has on home buyers.   These proven idea’s will help your home sell faster, and for more money, by working on buyer emotions and senses.

The Power of Color

Coordinate the colors of your flowering foliage.  Consider your selling season and plant flowers that perform well during that period.  Use plants that support your atmosphere and climate.   Also, use no more than 3 colors to give continuity and form to your landscape.

   Colors also have psychological power.  Green suggests freshness, coolness and vitality.   White shows up at night and conjures feelings of cleanliness.   Yellow is the first color our eye processes, so a spot of yellow by the front door will draw the eye to your entrance.   Red, yellow and Orange are all Hot colors, which excite and pick up the mood of any weary house hunter.

About.com: Landscape is a great website for the average homeowner.   The site provides idea’s and advice from professionals including a plant selector, great photographs, color scheme screener, DIY tutorials and helpful tips about hedges, fences, sidewalks, lawns and more.

Another great resource for help in creating an outdoor paradise can be found at HGTV.   

The Power of Smell

Realtors advise sellers to bake cookies or burn vanilla candles before showings or Open Houses because a comforting and pleasant aroma has the power to influence minds and moods.

In addition to color psychology, smart home owners give thought to the use of scents when planting a landscape.  They take advantage of the power of smell, especially near pathways and entry doors, that provoke a desired emotional response.  

     A few inexpensive and easy to grow suggestions that add a touch of scent to any landscape include lemon scented geraniums, jasmine, rosemary, lavender, basil, roses, hostas, honey suckle, gardenia or heliotrope.   In addition to providing months of enjoyment, many of these plants perform in a vareity of places such window boxes, planters, planting beds, hanging baskets or pathways.

When it comes to selling homes, a smart psychology landscape design can give you a huge advantage over your competition.   If buyers feel good while they look at your home, you will sell it quickly and for top dollar.

Home sellers or rehabbers who are considering a move   should focus their efforts on the home exterior for the highest pay back.

Remodeling Magazine, in cooperation with Realtors in 65 markets, issue their 20th Annual report of “Cost versus Value”.  The report named 6 home improvements that return greater than 80% of the cost, and of the 6, only one featured an interior upgrade.

The 6 improvements with the greatest returns are:

1. Siding Replacements using fiber cement materials returned 88.1% of the cost.
2. Wood Deck Addition returned 85.4% of the cost.
3. Midrange Vinyl Siding Replacement 83.2%.
4. Minor Kitchen Remodel return 83%.
5. Midrange Wood Window replacement 81.2%.
6. Upscale Vinyl Siding 81%.

Projects at the bottom of the cost recovery scale included home offices (57%), back up power generator (58%) and adding a mid-range sunroom (59.1%).

The remodeling report results verifies our belief that curb appeal is a crucial element for sales success in today’s real estate market.  

In a highly competitive environment, home sellers should take an objective look at their house from the street to determine if the look is one that welcomes or turns buyers off.

Thank you for visiting InfoTube.net homes for sale blog.  Please let us know topics that interest you.

     When you create an advertisement about your house, use only good photo’s.   Because 90% of all home shoppers begin their home search on the internet, buyers rely heavily on photographs to get a feel for the property.  This means the pictures you post of your home will likely be a buyers first impression. 

When selling a home, the time it takes to get a proper camera angle and lighting of the property will be well rewarded.  Home ad’s with good photographs receive 50% more hits and traffic than those with poor photo’s, or worse case, no photo’s.

In looking through the hundreds of homes for sale on InfoTube.Net, I find that most sellers do an excellent job of photographing their property.    I decided to showcase a few examples of “good and could be better” ad’s that I saw today for your review.  I hope these examples encourage you to look at your home ad and to make changes, if your ad doesn’t present your home in the best light.

Exceptional ad’s opt for a closeup angle of the property exterior, emphasize the entry and show off ammenities that buyers are interested in.   They  make sure that cars, toys, overgrown landscape or other distractions do not block the view of the house and emphasize close up details of tile, fixtures, etc. versus taking a shot of a blank wall or half a toilet.

Some ad’s are simply too dark .  In this example, the seller did an excellent job of photographing and describing the interior room views, but unfortuately the internet shopper may never see the inside photo’s.  The seller placed the dark photo of the front exterior in the first position, which is the only photo that appears in the home search screen.  This seller would benefit from retaking their picture with the sunshining on the front.  They can also edit it in a photo shop program to bring up the light and show off the house details and landscape.  A good example of how a seller can use the sun to highlight the exterior can be seen here.

A frequent problem I see is the photo is taken from too far away.   This often results in views of city sidewalks, streets, vacant lots or other details that distract the viewer from actually seeing the property.   This seller would benefit from moving the mini-van blocking the drive and focusing in on a close up of their home.

In conclusion, take a look at your InfoTube Home Ad from the view of a home shopper.   Does your ad emphasize the house, the neighborhood and the ammenties?  Have you used close ups to showcase detail work?  Have you removed all obstacles that distract from the views?  If not, you may want to take a new picture and present your home in way that will better attract a buyers interest.

Thank you for visiting InfoTube.net and Best Of Luck on the Sale of Your Home.   We are here to help.

What is Curb Appeal?   It is the first impression of a house as seen from the street.     

How can a do-it-yourselfer on a limited budget improve the curb appeal of their home?    Simply, add some color and life to the landscape. 

Any doubts??  Seeing is believing.   Even a bit of mulch thrown around existing plants helps this home show better.

When selling a home, little compares to the value that colorful plants and fresh mulch can add to the curb appeal.    An attractive landscape not only showcases pride of ownership, but plants are one of the few options that can instantly improve bad architecture or distract from a neighborhood eyesore with little to no expense or effort.

Take a Look at the Before and After pictures below.  You can immediately see the huge difference that colorful plants, mulch and a few dollars can make in the appearance of these homes.   

If you are convinced that improving the appeal of your property is a “must do”, adding color and tiding up your landscape is as easy as a stop by your local nursery.   Unless you know what plants to choose, arm your a picture of your present landscape.  Ask the experts what plants they recommend for your needs, then dig in.

If you want to learn about suitable plants and great idea’s, before visiting a local garden center, check out www.garden.org    Garden.org is a non-profit resource from the National Gardening Association.   The website is easy to use and features fun and helpful tools including: Plant selection screener; free seed swap; pest and weed control solutions; and much more.

A great website resource for detailed and reliable information about tree’s is www.arborday.org .  The website offers tree selection and identification, tips for pruning, fertilizing and placement.  They also give away Free Tree’s.   Become a member and receive 10 free flowering tree’s to use in your landscape, give as gifts or  plant randomly to improve the enviroment and beauty of your community.  The website also has fun and educational programs and give aways for schools and children.

Before Exterior Shot of Home For Sale

After Picture of the Exact Same House. 

Which home would attract you if you were shopping for a home????  Which home would you pay more to live in???   Exactly, and so would a prospective buyer. 

In today’s competitive housing market, curb appeal is more important to buyers than in the past.   If your home landscape is overgrown, it is time to trim, or better yet remove those old shrubs.  

It’s free, easy to do and will help your home sell faster and for more money.

If you are one of thousands of homeowners who have decided to sell your home, then do it now.  With more foreclosures and dropping prices predicted through the foreseeable future, there will not be a better time.

While our present housing market may not seem like the best time to get rid of a house, houses are selling.  If you need to sell, put my proven home-selling experience to work and start packing.

Pricing Game or Crying Game??

• Stop the insane practice of dropping your price a little trickle at a time.   The more times you drop your price, the more desperate you appear.  Buyers naturally assume everyone in town has seen your house and has crossed it off their list.  
• SLASH your price one-time and blow your competition away.   Go look at homes similiar to yours in your neighborhood.  Immediately drop the price of your home 10% less than your neighbors.  Buyers will come.

MLS Listing Power for by Owners:

• Take advantage of the MLS system for less money than a one-time classified ad.  The MLS sells 99% of all broker represented property and it will work for you, too.   The MLS system automatically sends your home listing information to millions of home shoppers each month, making it the most cost effective way to market your property, regardless of your location.  
• Put your home on the MLS today.  Visit www.why6percent.com or speak with a real live person by phoning them at their toll free line 1-800-381-9496, during normal office hours.   Why 6% is one of the MLS listing pioneers and has helped thousands of people sell their homes since 2004.

No Junk.  No Clutter. 

• You wouldn’t sell an old used car in a filthy condition with junk piled all around would you?   Then why would you try to sell a home filled with clutter?  Find a place to pack and store your personal stuff before you show your home to anyone. 

Curb Appeal.   The Munsters or the Brady’s?

• In years past, that purple front door and two foot tall weed patch you call a front yard may have not prevented a sale.   That is certainly not the case today.   Buyers are attracted to neat, clean and inviting.   With thousands of homes to choose from, buyers will simply drive by the house that looks like no one cares about it.   Show some pride of ownership and manicure your lawn and shrubery.  Fresh paint and inexpensive bedding plants that add color are also ”can’t go wrong” solutions.

If you hired the wrong Broker, Fire Them. 

• According to Realtor statistics, 90% of all business is done by the top 10% of brokers.  Given that brokers do not discount their listing fee’s based upon experience or success, hire a top producer.   Why pay 6% to an inexperienced or lackluster broker, when the same money will buy a pro??  Remember that brokers are salesmen.  If you have decided to pay thousands of dollars to have a broker handle your sale, hire the one who has proven they know how to work, and fire the one who doesn’t.

Thanks for visiting www.infotube.net.  If you have any questions about your sale or purchase, please contact us.  We have real estate experts standing by to assist you.

Selling a home is generally a nerve racking experience, even in a good market.  In a bad market, the difficulty in selling a home doesn’t stop with longer days on the market.  The negotiation phase is longer, too.  Smart buyers know the tables have turned in their favor and they negotiate for deals like never before.  

Smart sellers recognize the present environment and are anxious to negotiate a mutual agreement with any qualified party.  They are not offended by low offers, even if they seem ridiculous at first glance.   They keep their cool and realize that negotiating is a necessary, first step in the journey to sell their home.

Lowball Offers:

A lowball offer is one that is far below the home’s fair market value.   If your home is fairly priced at $250,000 and you receive an offer of $150,000…you have been low balled.   There is a huge difference between submitting an offer on the low end and lowballing.  

For the most part, low ballers are generally tire kickers, not serious buyers.  Many are graduates of “Get Rich in Real Estate for $1.00″ seminars.  They place often ridiculous offers in hopes of finding a deal, not unlike the Antiques roadshow personality that finds a Monet painting at a garage sale.  

When dealing with the lowball offer, the seller has options, but they should recognize the game and see if real interest exists.

• Sellers can reject the offer, which stops the negotiation in its tracks. 
• Sellers can opt to hardball and scruntinize every term of the offer, but the result is usually no progress, just hard feelings.
• The seller can choose to return a full price counter-offer, or one that is slightly less than full price, in hopes of continuing the negotiation.
• The seller can counter offer with a lower price and request that the buyer provide the comparable sales data used to arrive at the first offer price.  

Note:  Seller’s should always request a letter of pre-qualification, if one was not provided with the first offer.   It is a waste of time and patience to deal with a buyer that wasn’t qualified to buy in the first place.

If you have received a disappointing, lowball offer, try to find out as much as you can about the buyers and why they offered the price they did.  Before you show them the door, hand them a smart counter offer.  Not only will it keep the deal in play, you will learn more about negotiating with the next buyer.  

• Real Buyers don’t Play Games:   Real buyers often make an offer on the low end of the homes price range and see how the seller reacts.  Generally, sellers list at the high end of the price range, creating a gap.  The win-win for this situation to fire back a serious counter-offer that closes part of the gap, with sales data to back up your position.   Do not counter back with your bottom line price.  Buyers in this market will need to negotiate back and forth to feel they won a good deal.
• Is the Low Ball Offer a Reality Check??:   An low offer is not a low ball offer, if it accurately reflects current market values.   Many sellers do themselves a huge injustice by overpricing a property and leaving too much room for negotating price.  If your house has been for sale for months, or other homes like yours are selling, the “low ball” offer you receive may be one you seriously should consider.  Again, know your market like the back of your hand and price your home in line with your competition.
• Old Comp’s and Sales Data are Worthless:   If your home has been on the market for some time, you may need to revisit the current market value.   In a weak, declining market, prices keep declining.  If your house has been on the market for a long time, review all recent sales prices, before you reject any offers that appear low at first glance.
• Keep Your Cool:  Selling a home is an emotional experience for most of us.   Remember that as long as an offer is based on actual sales data, it isn’t insulting.  If you have an interested, qualified buyer, remain calm, patient, well informed and willing to pursue a deal.   Remember that the first offer is a fact finding mission and is not intended to insult.   The cooler head will prevail and close the deal.
• Take the Focus off of the Price:   Provide a list of ammenities included with your property.  Does your price include new appliances, granite counters, security or sprinkler systems that the buyer may not be accounting for in their offer?   Are you willing to help with the closing costs or work with them on the move in date?   Have you made improvements that save on energy bills?  If so, provide copies of your utility bills with your counter offer.  Have you remodeled or upgraded your home?  If so, provide warranties, contractor contact information, etc.
• Throw in a Freebie:   Many first time buyers don’t own lawn maintainence equipment, washer/dryers or kitchen appliances.   If you won’t be needing yours or don’t want to move them, throw them into the deal.   This often works real well with items like outdoor patio furniture, gas grills, storage buildings, hot tubs, etc. that are too expensive and too much hassel to move anyway.
• Play to Cash Strapped Buyers:   Often, buyers are tapped out by down payments, moving expenses and closing costs.  Smart sellers can possibly net more money by leaving the sales price higher and offering to pay some of the out of pocket expenses for the buyer.   Consider a counter-offer for the cash poor buyer that includes paying their closing costs or costs of repairs to the property.
• Low Ball Offer or Wake Up Call:   Many buyers heavily discount from the list price if the property is dated or in need of repair.   They often slash the offer price because they are uncertain how much money it will cost to update or repair the problem area’s.  Smart sellers can offer to take care of the fixes and repairs, so the issue of “how much will it cost” is off the table.      
• They’re Back:   Treat all real buyers with respect, regardless of how offended you may feel.  Many buyers will return to a home, even if the first deal didn’t work, if they like the owner and feel they are willing to work it out.   Be nice even if the deal falls apart, they may be back after some more house hunting.

In conclusion, whether the sellers reaction to a low offer is despair, anger or rage…it pays to remember there is more than one way to negotiate.  Consider all offers as serious and work from there. 

Qualified buyers should not be taken for granted in a weak, declining market.  Do yourself a favor.  Even if you can’t make the deal work out, calmly, stay in the game.  Use the experience to learn as much as you can before the next offer is presented.

As always thank you for visiting www.infotube.net.  Please send your questions to info@infotube.net and we will try to help.

In an effort to soften the sharp housing downturn, the Senate recently passed a $150 Billion Bill to provide relief for homeowners, in theory, for homebuilders, for certain.

The “foreclosure relief” bill, which now moves to the House for approval, sounds helpful, but falls shamefully short on solutions or assistance for homeowners losing their houses.   In fact, the only set aside for those facing foreclosure is a $100 million in counseling assistance, which possibly makes sense to prevent over-borrowing, but accompishes nothing after the fact.

Relief for Homebuyer’s received a mention in the bill, but the real help offered was for the benefit of bankers, developers and builders.   

The bankers and builders receive a $25 Billion Dollar Tax Rebate and plans to steer buyers to their foreclosed properties, with the lure of a $7000 future tax credit.   The bill provided a $0.00 tax credit, if homebuyer’s purchase a home owned by anyone else.

Translation:  Homeowners, who are paying their mortgages on time, will suffer an immediate $7000 loss in home value, as they attempt to compete against lenders, builders and developers when selling their property.

In Conclusion:   The $150 BILLION Dollar Relief bill harms taxpayers and homeowners, and does little for families in financial trouble.  The only “help” offered is for the politicians, banks and the powerful, cash laden, National Association of Home Builders, who threatened to stop handing over millions of dollars in campaign donations, unless they were cut in on the taxpayer give away.   The result.  When the votes were counted… the money counted more.  The Senate sealed the deal by a 84 to 12 margin.

Question:  Have we had enough, already???   Don’t you think if the US Congress really wanted to help the housing market, they would simply offer a $7000 tax credit to anyone who buys a home that they intend to live in (ie: no investors), no strings attached???    Instead, homeowners and buyers are penalized in favor of the banks and builders who likely created this mess in the first place.

Action:  I urge everyone who cares about their home to immediately write their State Representive in protest, before this bill is passed.    We don’t have millions of dollars for lobbiest or bribes to get their attention, but we do have numbers and the power of the pen on our side.

    If the seasons have changed and your home is still on the market, do yourself a big favor and update your photographs.  There is nothing that turns off buyers and screams “Stale Listing” like the picture of a snowy lawn in the height of spring.

The spring selling season is the kick off for home shoppers who are sick and tired of winter glum.   Play to your audience and replace those dismal, gray, outdoor photo’s with ones of bright flowers, blooming tree’s and green grass.   And, if your area hasn’t welcomed spring yet, fudge a little and use ones you took in prior years.

Please don’t forget check your interior shots, too.    Replace any of those that are dated or make your home look cold and uninviting.   Buyers don’t find those photo’s of Christmas decorations, snow on the patio or roaring fires inspiring in mid-April.

Changing your photo’s at www.InfoTube.net is easy and quick.   Stage your shots and upload them to your computer.  Be sure to name and number them so you remember what each photo is and the order of appearance.  (Note:  Watch our 2 Minute How To Upload Photo’s Video) Then, log into your desktop and click Edit Photos.   Replace all the dated pictures and congratulate yourself on going the extra mile.

Remember, our business is helping you sell your home and we want you to look good.   Nothing attracts buyers like a good picture, so do your best and happy spring!!!

The 60’s music group “Bread” coined the truism that..”a picture paints a thousand words…”  and whether you remember the song or not, the words are as true as the day they were first penned.

Photograph’s are a representation of your home and a vision of an imagined lifestyle for the home shopper.    They can immediately paint a picture of a home that is well maintained, or not; light, dark, cramped, or spacious, bright and inviting.  

When selecting a photograph to represent your home, view it objectively and ask yourself what picture are you painting?  What words come to mind when you look at the snapshot?   Is this a picture someone would excitedly forward to their friends, co-workers and family?  If not, stage the shot and update the photograph.

Below is a collection of photo’s that conjure words, but are the words ones that encourage a sale or stop interest in its tracks????

 Deer hunter, dark, rustic, rural

Cramped, no storage, clutter, small

I’ll go if you will; dark, scary, what’s the point

Eddie Kruger, Halloween, Only the Shadow Knows…

Have a chuckle, but do take a look at your photographs.   Photographs sell houses…and don’t.  What picture do your photo’s paint????

Thank you for visiting www.infotube.net   If you have some funny real estate photo’s, please send them our way!

       If you are one of the millions of homeowners who have an Adjustable Rate Mortgage (ARM), be wary of offers of assistance from lenders.  Through a recent experience, I discovered why we should educate ourselves about the terms of our existing loans, before talking with our lenders.

I received a letter this week from Citibank, my lender, entitled “Mortgage Volatility = Mortgage Tranquility”.  The letter, set in threatening bold type, warned that my Adjustable Rate Mortgage was about to RESET.   Triggering fears that my decision to finance with an ARM would come back to haunt me, I interpreted this “call to action” as a sign that my lender was looking out for both of us.  Only after I experienced the “personalized service from the people I know”, did I discover how gullible they still believe we are.

Upon reaching a Citibank agent, I was warned that my mortgage interest rate would jump from 4.375% to 6.75% on June 1^st, 2008.  The agent immediately offered to help me avoid the foreboding event with an offer to refinance my loan at only 6.25%.   My first reaction was “whew, am I lucky”, but then I wondered…”How does this young lady know what interest rates will be in June???”   “Haven’t we heard talk of another interest rate cut on the 18^th of March, for example???” 

Smelling a rat, I decided to learn the logic behind her advice to get rid of my ARM.  I ask what Index rate and Margin she was referring to, so that we could compare the numbers.  Unbelievably, my agent had no

I decided to push on, determined to learn if anyone at Citibank could tell me what facts they relied upon, before recommending a new loan.   On my third attempt, I reached a lady who knew a little

So, I ask the powers that be…What is going on at Citibank??  Where are the people in charge of policing lending practices on behalf of the consumers???  Have I simply misread the daily headlines reporting that millions of homeowners are losing their houses?  Have I misunderstood this crisis to be due in part to our lenders pushing ill-advised loans in exchange for a quick buck?   In spite of all the mournful rhetoric, it appears that little has changed in terms of stopping this behavior or protecting citizens.

My advice for consumers is to remain highly skeptical, when considering any offer from lenders!!   To protect your future, you must arm yourself with the terminology and facts about your present loan.  Take nothing for granted.  Force your lender to prove the numbers that justify their recommendations.    

FAQ:  No lender can honestly recommend refinancing as an option, without first knowing how the old and new loans compare.   Before you are lured into buying a new loan, spending thousands of dollars in closing costs, know what the future pay off will be versus the cost.  Then and only then, can you make an

Thank you for visiting www.infotube.net .  Please check in with us tomorrow, when we demystify the Adjustable Rate Mortgage Loan.

As always, please send your questions or comments to info@infotube.net  

With falling home prices, rising energy prices and expanding waist lines, a walkable neighborhood is always in demand.   A play on that idea is found at a new website which identifies walkable neighborhoods in any town.   

Check out the “walkability” of your neighborhood by going to www.walkscore.com .  Enter a property address and the website will rate the neighborhood on a scale from 0-100 on how easy it is to walk in the area and destinations within a one-mile radius.   Walkscore.com makes it fun to identify grocery stores, shops, churches, parks, etc. in any neighborhood and also provides info on area demographics, crime, etc.  

If you are buying or selling a home, visit the walkscore.com website and check out your location for walkability, community and accessibility.

As always, thanks for visiting infotube.net.

If you are one of millions of homeowners who are struggling to keep your home, please check out Hope Now.  Hope Now is a cooperative effort between HUD-approved counselors, investors and lenders to maximize outreach efforts to homeowners in distress. 

Hope Now is a non-profit organization and also offers  useful links and resources for homeowners. 

You can reach a Hope Now counselor by dialing 1.888.995.HOPE or by visiting the website www.hopenow.com

There are a number of ways to offer seller financing on real estate.    How to structure the offer depends upon whether you own your home free and clear or whether you have a loan or loans against the property.    

Please read previous posts on the pro’s, con’s and risks of seller financing before you decide whether bankrolling your sale is the right step for you.

Instructions for Seller Financing with an outstanding loan:

1. Seller and buyer agree to a purchase price.
2. Seller verifies the outstanding loan balance on the current loan or loans.
3. Seller should pre-qualify the Buyer, as any lender would do. (Have the buyer provide 2 years tax returns, a pay check stub year to date and a copy of their credit score and report)
4. Parties determine how much of the gap exists between the purchase price and the outstanding balance, and how much of that balance the seller is willing to finance.   (For example:   If the agreed upon purchase price is $250,000 and the outstanding loan balance is $150,000, the gap is $100,000.  How much of the $100,000 will be financed 80%, 90%, etc.   The remaining percentage will be paid to the seller as a down payment.)
5. Parties determine the interest rate and length of the loan term for the seller financed portion of the purchase.
6. Parties calculate the monthly payment amount of the seller financing.
7. Hire an attorney or title/excrow officer to draft the paperwork for the “wrap around” loan. 
8. The seller must continue to make the payments on the original loan.
9. The seller should require proof of payment for all insurance premiums and property taxes.

NOTE:   A wraparound mortgage requires that the seller receives a payment from the borrower that covers the original mortgage payment and the payment on the second or seller financed portion.

Wraparound mortgages are illegal in some states or may be forbidden by some lenders.   If wraparounds are not allowed, be warned that the lender can call your note due in full and payable now for violating you original loan terms.  If you do not know the terms of your original loan, please check with your lender.

Instructions for Seller Financing with No Outstanding Loan.

1. Seller and Buyer agree to a Purchase Price for the Property.
2. Seller should pre-qualify the Buyer, as any lender would do. (Have the buyer provide 2 years tax returns, a pay check stub year to date and a copy of their credit score and report).
3. Determine the interest rate and length of the loan.  (Typically, seller financing carries a higher interest rate than the bank would charge due to the risk.  Most seller financed loans are amortized over a 30 year period, but the outstanding loan balance will be due in full in 5 to 7 years.  This is arrangement is called a ballon note or loan.  It provides the buyer time to straighten out a credit problem, accrue job history, etc. which will enable them to refinance at a later date and pay off the balance due to the seller.)
4. Calculate the mortgage payment.   (This can be done on the internet or provided by any lender.   The report will show the interest and principle paid and the remaining balance due the seller.)
5. Hire an attorney to draft the formal agreement, spelling out the sales price, loan amount, rate of interest and terms.   The attorney or title company can also close the transaction.

Note:   Seller should always have proof that property taxes and insurance premiums are being paid by the borrower.  Also, it is a good idea to add a late payment fee to the agreement.  Late fee’s will help keep your payments coming on time.   In the case of loan default, the seller may have to foreclose and take the property back.