[kaycee]

I hear you sdr, and my agent felt similarly to an extent. The only difference was that Beaufort SC is a small town and everybody knows each other. My agent had known this family well for years and felt she was trustworthy. And by well I mean from church, and a local business owner, on the board at the Y, etc. Not going out to dinner friends. My realtor said if this was an a complete stranger she would have told me to walk away. As it was she really almost fought me not to take it because she knew it wasnt a great deal. But at the same knew that she couldnt tell me that she could get me any better later. Plus obviously that she could wait two years for her money was a big dissinsentive.

[kaycee]

I hear you sdr, and my agent felt similarly to an extent. The only difference was that Beaufort SC is a small town and everybody knows each other. My agent had known this family well for years and felt she was trustworthy. And by well I mean from church, and a local business owner, on the board at the Y, etc. Not going out to dinner friends. My realtor said if this was an a complete stranger she would have told me to walk away. As it was she really almost fought me not to take it because she knew it wasnt a great deal. But at the same knew that she couldnt tell me that she could get me any better later. Plus obviously that she could wait two years for her money was a big dissinsentive.

[kaycee]

I agree with all of your posts.

I do think rent-to-own deals were historically geared towad the seller not the buyer. That was why they were rare I think. But as we know now, nothing is on the sellers side now so I’m clearly negotiating with my hands tied behind my back.

Gn, I absolutely considered your scenrio. That if the house appreciates, they win and if my house depreciated why would they settle. It kept me up several nights as a matter of fact. It is a huge part of the risk. But my rationale is that if they do walk away, I’ve got some money from escrow and I’ve been renting all along, and I still have the house to rent or sell.

They did ask for a portion to be applied to closing, and I gave them the option of raising the rent and I would apply a portion or keep the rent they asked for and apply nothing. They chose the lower rent.

Their rationale was that they wanted to use the money to upgrade the house, specifically the bathrooms which are clean and functional but “low end” finishes. They felt that if they put in brand new bathrooms and then walked, I would have more “value” in the house and they would have to walk away from the money they spent on them. BS I know. Granite bathroom counters will be meaningless in a freeefall market. But it would show a personal investment in the buying of the house. They were adamant about this and they wouldn’t do the deal if they couldn’t immediately begin improving the house which they felt wasn’t to their standards.

And Radelow, they did get a fabulous deal. I admit, it is certainly not the deal I was hoping to do. But are you really surprised? I mean, you’ve been on this board. “Don’t be stupid and buy now” “If you own a home sell it now at any loss” “Its only going to get worse”

I guess what I really have is a tenant without any landlord problems and a possiblity of a sale in my future. But you know, I took what I could get.

Interestingly, my B-I-L just called me. He has been trying to sell his condo in South Forida for about 2 years now. And the market there I think is worse than anywhere. He was just offered a rent to own deal. Seriously. Because the buyers can’t sell their house. I really wonder if this is going to be new trend. Are any realtors on the board seeing this?

[kaycee]

I agree with all of your posts.

I do think rent-to-own deals were historically geared towad the seller not the buyer. That was why they were rare I think. But as we know now, nothing is on the sellers side now so I’m clearly negotiating with my hands tied behind my back.

Gn, I absolutely considered your scenrio. That if the house appreciates, they win and if my house depreciated why would they settle. It kept me up several nights as a matter of fact. It is a huge part of the risk. But my rationale is that if they do walk away, I’ve got some money from escrow and I’ve been renting all along, and I still have the house to rent or sell.

They did ask for a portion to be applied to closing, and I gave them the option of raising the rent and I would apply a portion or keep the rent they asked for and apply nothing. They chose the lower rent.

Their rationale was that they wanted to use the money to upgrade the house, specifically the bathrooms which are clean and functional but “low end” finishes. They felt that if they put in brand new bathrooms and then walked, I would have more “value” in the house and they would have to walk away from the money they spent on them. BS I know. Granite bathroom counters will be meaningless in a freeefall market. But it would show a personal investment in the buying of the house. They were adamant about this and they wouldn’t do the deal if they couldn’t immediately begin improving the house which they felt wasn’t to their standards.

And Radelow, they did get a fabulous deal. I admit, it is certainly not the deal I was hoping to do. But are you really surprised? I mean, you’ve been on this board. “Don’t be stupid and buy now” “If you own a home sell it now at any loss” “Its only going to get worse”

I guess what I really have is a tenant without any landlord problems and a possiblity of a sale in my future. But you know, I took what I could get.

Interestingly, my B-I-L just called me. He has been trying to sell his condo in South Forida for about 2 years now. And the market there I think is worse than anywhere. He was just offered a rent to own deal. Seriously. Because the buyers can’t sell their house. I really wonder if this is going to be new trend. Are any realtors on the board seeing this?

[kaycee]

Perry Chase,

It is true that you take a risk when you plan to leave in less than 5 years. But as long as you evaluate that risk and don’t go in blind you can eleviate some of that risk. As a military family, you face that question frequently. In my first house in DC metro area that I sold in ’02, I made about $200K in 4 years. This time, if all goes well, I’ll lose about $50K. Not bad overall I guess. (Not in equity, just in improvements I put in that I didn’t get back, expenses on the empty house, etc.) But yes, all things being equal, I certainly wouldn’t recommend it genrally. But I have seen it work. I knew one military family that had a rental house in every town they had been stationed in. They bought when they moved and rented when they left. They only rented to other military families and of course that was a constant source of customers. Worked for them, but I then I haven’t talked to them since BRAC.

I put the house on the market in Feb ’06. I left the house vacant, but fully furnished, clothes in the closet, etc until Oct ’06. At that time I was forced by Navy rules to “pack out” as we say and put my stuff in storage until I had somewhere for it to be delivered. (which turned out to be May ’07 when I had to settle on the house I bought in DE) .

There is a broker and she will get a commission at settlement which could be two years from now. There is a fully effective agreement of sale, it just has a closing date of 8/31/09. The buyers have the option to settle early. If they walk, I guess she gets nothing and just has to hope that I relist it with her.

[kaycee]

Perry Chase,

It is true that you take a risk when you plan to leave in less than 5 years. But as long as you evaluate that risk and don’t go in blind you can eleviate some of that risk. As a military family, you face that question frequently. In my first house in DC metro area that I sold in ’02, I made about $200K in 4 years. This time, if all goes well, I’ll lose about $50K. Not bad overall I guess. (Not in equity, just in improvements I put in that I didn’t get back, expenses on the empty house, etc.) But yes, all things being equal, I certainly wouldn’t recommend it genrally. But I have seen it work. I knew one military family that had a rental house in every town they had been stationed in. They bought when they moved and rented when they left. They only rented to other military families and of course that was a constant source of customers. Worked for them, but I then I haven’t talked to them since BRAC.

I put the house on the market in Feb ’06. I left the house vacant, but fully furnished, clothes in the closet, etc until Oct ’06. At that time I was forced by Navy rules to “pack out” as we say and put my stuff in storage until I had somewhere for it to be delivered. (which turned out to be May ’07 when I had to settle on the house I bought in DE) .

There is a broker and she will get a commission at settlement which could be two years from now. There is a fully effective agreement of sale, it just has a closing date of 8/31/09. The buyers have the option to settle early. If they walk, I guess she gets nothing and just has to hope that I relist it with her.

[kaycee]

Oh, I am telling the truth. And I know its not a great deal. But when 45 of the 170 houses in your development are for sale and you have had your house on the market for 16 months you do what ya gotta do.

Perhaps “sale” is a strong word. But I do have a signed agreement of sale I can try to enforce down the line. I know, I know.

I should say that these are not complete strangers. They live in my neighborhood. I have one of the 15 houses on the water, they currently live in one of the 160 houses not on the water. They saw this as their opportunity to move up to a waterfront house that in a more stable market they would not pay the premium to own. Their house is pristine. The one in the neighborhood that always has the immaculate yard. So I’m doubting that is going to change. Also, the wife is a local business owner with signifigant, long tem ties to the community. So I have some safety there.

I’m taking some huge risks here, I admit.

But I figure if they walk in the end, at least I’ve covered my nut and been able to take some losses off on my taxes. Then I can put my property back on the market in two years in a hopefully more stable market. Or I get it back and I can rent it again.

If they come through then I get a monkey off my back, and out of my wallet.

[kaycee]

Oh, I am telling the truth. And I know its not a great deal. But when 45 of the 170 houses in your development are for sale and you have had your house on the market for 16 months you do what ya gotta do.

Perhaps “sale” is a strong word. But I do have a signed agreement of sale I can try to enforce down the line. I know, I know.

I should say that these are not complete strangers. They live in my neighborhood. I have one of the 15 houses on the water, they currently live in one of the 160 houses not on the water. They saw this as their opportunity to move up to a waterfront house that in a more stable market they would not pay the premium to own. Their house is pristine. The one in the neighborhood that always has the immaculate yard. So I’m doubting that is going to change. Also, the wife is a local business owner with signifigant, long tem ties to the community. So I have some safety there.

I’m taking some huge risks here, I admit.

But I figure if they walk in the end, at least I’ve covered my nut and been able to take some losses off on my taxes. Then I can put my property back on the market in two years in a hopefully more stable market. Or I get it back and I can rent it again.

If they come through then I get a monkey off my back, and out of my wallet.

[kaycee]

No, sadly it is nowhere near escrow. Nor is the loan process starting. <>. But all inspection contingencies are through and they took posession today. I started a new thread with the details.

I do have a question about ARMS though.

I took a 5/1 ARM because I thought, I would be out in less than 5 years. But if you thought that you were going to stay in a house long term (back in ’02 or so timeframe), was a 5/25 available to you? Were the rates on that signifigantly higher? Why didn’t more people sign up for those? It would seem that that type of a mortgage would be more appealing to the majority of people because you are only risking a jump once.

[kaycee]

No, sadly it is nowhere near escrow. Nor is the loan process starting. <>. But all inspection contingencies are through and they took posession today. I started a new thread with the details.

I do have a question about ARMS though.

I took a 5/1 ARM because I thought, I would be out in less than 5 years. But if you thought that you were going to stay in a house long term (back in ’02 or so timeframe), was a 5/25 available to you? Were the rates on that signifigantly higher? Why didn’t more people sign up for those? It would seem that that type of a mortgage would be more appealing to the majority of people because you are only risking a jump once.

[kaycee]

Yes Former SD, I meant that I would have to get a non-occupied rate and that would be higher than the low 6% rate I have now. So it didn’t seem to make sense. My margins, as I recall were 2% a year. At this point, and I may be very wrong about this, it didn’t seem that it would go up to 8% the second year because mortgages were still below 7%. I know I would need to check what the rate is tied to. But I do remember doing research at the time and making sure my rate was tied to something that was pretty stable.

But anyhow….

!!!!!!! I SOLD MY HOUSE TODAY. YEAH.!!!!!!!!!!

;), ;0, ;0, ;), ;0, 😉 (Me doing the happy dance)

It’s not a great deal. But hey its a deal right?

[kaycee]

Yes Former SD, I meant that I would have to get a non-occupied rate and that would be higher than the low 6% rate I have now. So it didn’t seem to make sense. My margins, as I recall were 2% a year. At this point, and I may be very wrong about this, it didn’t seem that it would go up to 8% the second year because mortgages were still below 7%. I know I would need to check what the rate is tied to. But I do remember doing research at the time and making sure my rate was tied to something that was pretty stable.

But anyhow….

!!!!!!! I SOLD MY HOUSE TODAY. YEAH.!!!!!!!!!!

;), ;0, ;0, ;), ;0, 😉 (Me doing the happy dance)

It’s not a great deal. But hey its a deal right?

[kaycee]

Sorry HLS I guess I should have been more specific. My mortgage (originally about $322K now down to about $300K) is at 4.125% My P& I is about $1,650. My ARM should reset to just over 6%. I figured that to be about $300 more a month.

The “PLAN” was to sell after 4 years (we’re military and figured we’d get orders in 3 ended up being 4) House has been on the market over a year now. Highly annoying but another story.

Anyway, I am perfectly capable of paying an additional $300 a month on the house. If I was actually living in it I wouldn’t even blink. Obviously, I can’t refi now since it isn’t my primary anymore. But still 6% isn’t a bad rate either. I don’t see it as a crisis. But then, I didn’t use the ARM to qualify into a house I couldn’t afford. But I’m sure that I’m the majority, who simply saw the teaser rate as a way to save some money on the front end.

[kaycee]

Sorry HLS I guess I should have been more specific. My mortgage (originally about $322K now down to about $300K) is at 4.125% My P& I is about $1,650. My ARM should reset to just over 6%. I figured that to be about $300 more a month.

The “PLAN” was to sell after 4 years (we’re military and figured we’d get orders in 3 ended up being 4) House has been on the market over a year now. Highly annoying but another story.

Anyway, I am perfectly capable of paying an additional $300 a month on the house. If I was actually living in it I wouldn’t even blink. Obviously, I can’t refi now since it isn’t my primary anymore. But still 6% isn’t a bad rate either. I don’t see it as a crisis. But then, I didn’t use the ARM to qualify into a house I couldn’t afford. But I’m sure that I’m the majority, who simply saw the teaser rate as a way to save some money on the front end.

[kaycee]

Perhaps my situation is different. My ARM is set to reset in May/June of next year. But buy my calculations, that is only a $300 increase on my $300,000 loan. Granted that is almost a 20% increase, but it is still not 1K a month. Wouldn’t there be an awful lot of people out there like me for whom this will not be a cataclysmic event?

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