Sellers get out from under their mortgage, Buyers, typically good people who've had something bad happen to them to change their financial situation for the worse get a
Detroit, MI (PRWEB) February 11, 2009
Rent-To-Sell attracts home buyers with poor credit, sellers who need to sell quickly, Realtors® dealing with a slow market.
Under plans announced on Friday, the two largest U.S. housing finance companies, Fannie Mae and Freddie Mac are pioneering programs to let borrowers rent their homes after default.
Fannie Mae is also planning to expand rental options after default and a new "rent-to-own mortgage program," said spokesman Brian Faith.
"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," David Moffett, Freddie Mac's chief executive officer, said in a statement.
In November, Toll Brothers Inc., the largest U.S. builder of luxury homes, in an effort to attract buyers introduced rent-to-own programs in Scottsdale, Ariz.; Singer Island, Fla.; Washington, D.C., Pennsylvania, and Manhattan.
Similarly, real estate agents are suggesting that their clients with homes that have been sitting unsold for months offer lease with option, or "rent-to-own" as an to attract potential buyers who find themselves unable to obtain new mortgages because of job loss or other decrease in income.
"It's a win-win-win solution," says Wendy Patton, Clarkston, MI, widely considered the country's leading expert on lease options and a licensed real estate broker in 3 states, international speaker, author and coach.
"Sellers get out from under their mortgage, Buyers, typically good people who've had something bad happen to them to change their financial situation for the worse get a "second chance" in life."
The architect behind mortgage-backed securities Franklin Bank Chairman Lewis Ranieri told Hofstra University conference-goers on December 1, 2008 that the federal government and private partners should remove 1 million homes from the housing market and turn them into lease-to-own rentals in order to turn the economy around.
In today's market, assiduous real estate agents are thinking outside the box and using this technique to attract reluctant buyers.
"I was really at my wits end," said Monica Quisenberry, recent widow, after being laid off and in a home with an adjustable mortgage she could no longer afford. "I put my house up for sale with a Realtor®, and waited. We had several showings, but nothing. Six months later, I took it off the market. I put an ad in Craigslist but kept getting calls from people who asked if I would 'rent to sell' and I was afraid because I didn't want renters in my house. I didn't know what to do. When I met Wendy, she made me feel so much better. I have learned that I can do this, move on, and still have control and be totally protected. She gave me hope. "
For more than 23 years Wendy Patton has focused on creative financing strategies, and has personally completed over 600 lease with option transactions and has assisted tens of thousands of buyers and sellers with their own.
A lease with an option to buy involves leasing a home from a seller who might not be able to sell it or rent it otherwise. The buyer pays the seller a non-refundable fee, called an option fee, and then pays monthly rent, usually for one to two years until they can qualify to buy the home. During that period, the seller benefits by having their payments made, and to find a buyer that may not have been able to buy their home, if they had relied on conventional financing. Realtors® benefit by matching their unqualified buyers with sellers.
For more information or to purchase Wendy Patton's new book Rent-To-Sell or companion training course on cd visit http://www.wendypatton.com. Rent-To-Buy, coming out in May, 2009, is available for pre-order at http://www.wendypatton.com. Wendy as two other books, Investing in Real Estate with Lease Options and "Subject-To" Deals, and Making Hard Cash in a Soft Real Estate Market, also available at her website.