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Tuesday, April 1, 2014

Thinking about Rent to Own? Why you should consult your Real Estate Agent.

 
We are well aware of the term “rent to own”, you might have seen a yard sign at an intersection of a busy highway with those words boldly printed on it. The classifieds sections in the newspapers are full of these “rent to own” classifieds. Whether you are considering to purchase a home or an appliance, if you do your research, chances are, that you are likely to get a very good “rent to own deal” if you know what you are looking for and know how to negotiate the deal. If there ever was a time to be more informed as a buyer in these types of transactions its now, ignorance is no defense. What you do not know, will hurt you!

Indeed the “rent to own” industry is a very lucrative industry, with many huge corporations selling franchises based on the “rent to own” business model. They have built empires with the sale of “rent to own” inventory and have dissected the “rent to own” sales process down to a science. Although the “rent to own” proposition sounds very appealing for those that are considering the purchase of a piece of real estate, the truth is that the buyer normally ends up paying double what the merchandise is actually worth.  While this may be great for those who have bad credit, it is better to consult a competent real estate agent to help you navigate such a complex transaction. Why rush into a 30 year plus financial commitment without obtaining all the facts so as to make a wise educated decision based on sound advice from a qualified real estate agent. Many people are not too excited about the prospect of paying a real estate agent a hefty commission for facilitating the real estate transaction.

Let’s address that issue, which is worse? For purposes of illustration, say you are looking at purchasing a $200,000 house, and the commission due to the agent is $10,000, and there is an option to do your own deal without the real estate agent, so as to save yourself the $10,000 that would have gone to the agent. You go ahead and do the deal without the real estate agent, close the deal, then months later, discover that there was some mold problem, as well as a structural foundation problem that you were not informed of, and because you chose not to hire a competent real estate professional, you had no way of doing your own due diligence and are not left holding the baby. Suddenly you are now confronted with another $100,000 in repair costs and taxes and other city code enforcement expenses that you have to absorb in addition to the mortgage payments that you are already making on a monthly basis. Which is a better proposition here? Is it not easier to pay the real estate agent their commission and let them do what they are trained to do, instead of cutting corners and getting hit with such overwhelming expenses as a consequence of your greed and dishonesty? Saving money is important, but is it so important that you should expose yourself to a diminishing return on your investment?

Even though rent to own may be good for a short period of time, it proves to be an expensive way for someone to buy something they intend to keep.  Rent to own merchandise for example, may sound quite compelling depending on the way in which the deal was constructed so as to lure you into an arbitrary contract that is only in the best interest of the seller. The agreement is normally for a few months, which is where the company makes their money.  Although you may be paying just a few dollars initially, the total amount quickly adds up to nearly twice the cost of the item.

Along with paying rent, you’ll also have to pay applicable sales tax as well.  Like merchandise, rent to own real estate has its disadvantages.  Even though it can be great for those with not so great credit, you’ll normally end up paying back a lot more than you would with a mortgage.  You’ll still have to pay back your lender with a mortgage, although that amount won’t be nearly as high as it would if you decided to get a house on a rent to own basis. In most cases, rent to own houses are put up on the market by the owner.  This way, you’ll deal directly with the owner.  It will start out as a traditional lease, then proceed to a rent to own basis if you decide you want to keep the home.  You and the owner will then work out an arrangement, which will normally be quite a few years.  Some owners are very flexible and will work with you just to get the price they want for their home, while others will charge you quite a bit more, in order to make a hefty profit.

If you have bad credit and can’t get approved for a mortgage, then rent to own would be your next best option.  Although some don’t like to do it due to the price, for many it’s a better alternative than an apartment.  With rent to own houses you are paying money towards the home, instead of just paying rent.  In some cases this is fine, although you should make sure to double check with the owner before you agree or commit to anything.  This way, you’ll know how much you’ll be paying for the home - and for how long. If your goal is to end your home search frustrations due to poor or no credit, insufficient down payment, or any of the other common myriad of issues associated with this process then we can help! The only requirement we have is that you follow our unique but extremely simple process that will take your frustrations away.

FACT: When you rent you are essentially paying your landlord's mortgage for him or her. You receive zero tax benefits and lower your self worth substantially. Why would you knowingly continue this if you were able to buy a home? But millions do every single day because they are uninformed, frustrated, or simply think they can't qualify. So what do you do? You consult a qualified real estate agent to help you and make sure that your financial interests in the transaction are protected. It is better to let the Real Estate Agent do their job and get out of their way, so that you can get some peace of mind. The last thing you need is a surprise after the deal has been concluded that costs you hundreds of dollars to rectify. Let them do their homework to help cut out all the pain and confusion. So how do you go about locating a competent real estate agent to help you with your real estate transactions? What criteria do you use to find a competent real estate agent to make sure that things are being done the right way, and that your interest will be protected?


Here are suggestions of what you should consider when looking for a qualified real estate agent to help you with your real estate transactions.

A good real estate agent should be personable, meaning you want to deal with someone that does not make you feel uncomfortable. If you do not feel comfortable sitting across them for more than one occasion chances are you will not have a good working relationship. Most real estate agents who interact with people a lot, will make sure that you feel comfortable with them. After all it is within their best interest financially to do so.

Is your Real Estate Agent licensed? Do not just assume that the person you are doing business with is a real estate agent, just because they claim that they are. Do your own due diligence, contact the real estate company that the person claims to work with and verify that they actually work for that company. You will be surprised at how many people are out there on the internet impersonating real estate agents, only to steal your identity for the purposes of wiping out your bank account. You can never be too careful.

Is your real estate agent tech savvy? We live in a dynamic technological world where information dominates each facet of our lives. A real estate agent who is not tech savvy is simply unacceptable. You need a real estate agent who understands the internet, and has a comprehension on the behavior patterns of consumers on the internet. In other words, a good real estate agent need not be an expert on social media, but has to have an appreciation for the fact that consumers start their home searches online, and should have a plan of action in place to maximize all potential realized from their customer’s activities online.

Is your real estate agent knowledgeable? In other words, is your real estate agent familiar with purchase contracts and how they work? So they have a license great, that just means that they took a course and got a certificate and a title behind their name, it does always mean that they are fully versed in all aspects of the contract. What you need to know from your real estate agent is whether or not they specialize in what you are buying or what they are selling for you. What is their specialty? Do they specialize in only commercial property? If so, why would you ask them to help you buy or sell your residential property? Do they only specialize in short sales? Do not mess with the system to suit your own needs. Get the right real estate agent for the right transaction. A commercial agent for a commercial property, residential agent for a residential property, a short sale agent for a short sale property etc.

Is your real estate agent familiar with the local market? Your real estate agent needs to be familiar with your area. They ought to know who the local builders are, what the local market conditions are for your neighborhood, not some area 50 miles away, as that is a different market altogether with different market characteristics. Because of demographic differences, there is no way that you can assume that all markets are the same; a good competent real estate agent will know that and will advise you accordingly.

Does your real estate agent have good communication skills? If your real estate agent does not return your calls when you call them, that should be a red flag that you should notice immediately. Good real estate agents, always consult with their clients and keep them informed of changes occurring in the sales process as soon as they do. It does not make sense for you to work with a real estate agent that does not communicate, given that the real estate industry is functions on constant communication. Your real estate agent needs to know and understand how to communicate with you. They need to know what your preferred method of communication is for them to communicate with you, and they need to respect that. For instance, there is no need to expect an email from your real estate agent, if you have told your real estate agent that your preferred method of communication is through facebook and your personal smart phone. Your real estate agent needs to be able to check in with you every so often just to maintain a good rapport with you even if there is nothing to report. That is part of customer service, and if they hope to get referrals from you, they should not have a problem with that.

Does your real estate agent tell you the truth? This one is straight forward, if your real estate agent cannot tell you the truth; it could lead to you entering into financial contracts that are not in your best interest, but only in the agents interest.

Is your real estate agent a full time real estate agent? Will your real estate agent be there for you when you need them? Or will they be away on a side gig trying to make ends meet at your expense? If a buyer or seller was to call you depending on which one of those you are at the time, will your real estate agent be there to handle the transaction, or will you have to wait for them to get back to you after picking up the kids from daycare?

Is your real estate agents integrity in question? Do not just take your real estate agents word for their reputation do your due diligence. Integrity is not spoken it is demonstrated, there are some simple things that you can use to gauge your real estate agents integrity. Things such as returning your calls, as agreed. You word is bond, if your agent does not do what they agreed to with you, it shows you their character. Talk to former clients that did business with them and find out what type of person they are. Contact your better business bureau to see if there are clients that have complaints against them. Do your investigation to see if they have any legal issues, for instance, if your real estate agent has been disciplined for actions such as misappropriation of client’s funds, you should not feel comfortable doing business with that real estate agent, or having them represent you in any real estate dealings.

Graham Odenyo, is a Social Media Strategist and Project Manager at Affordable Mobile Marketing, A full service Social Media Mobile App and Email Marketing Advertising agency. This is original content created for Cassandra Hayden of Hayden Real Estate, Atlanta GA. If you are a business owner in need of customized marketing solutions for your company please contact us via our website (see our website for more information, http://affordablemobilemarketing.info ). Affordable Mobile Marketing is proud to partner with Cassandra Hayden of Hayden Real Estate Atlanta GA, as they expand their business, for more information about Hayden Real Estate in Atlanta GA, please visit their website: http://www.cassandrahayden.bhhsgeorgia.com/

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