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Old 11-11-2011, 12:16 PM
 
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Anyone have any info regarding rent-to-own options? I am seeing some houses listed for sale as well as rent, so I wonder if the sellers would be interested? Due to previous housing situation, we are not able to buy right now, but will be in a year or two...hopefully!
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Old 11-11-2011, 12:19 PM
 
Location: NJ
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Everything I have read about them is pretty much not good. I think the % of these that actually close as a sale are very low.
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Old 11-11-2011, 12:43 PM
 
Location: Northern NJ
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The vast majority of homes that are offered both for rent and sale are in an "upside down" mortgage situation. If that is the case, the odds of your rental turning into a purchase are low. If you are unable to buy, just do a clean rental and buy when you can. It's much easier that way.
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Old 11-11-2011, 01:15 PM
 
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Quote:
Originally Posted by Marc Paolella View Post
The vast majority of homes that are offered both for rent and sale are in an "upside down" mortgage situation. If that is the case, the odds of your rental turning into a purchase are low. If you are unable to buy, just do a clean rental and buy when you can. It's much easier that way.
I'm curious why you say this? Is it because of the lengthy process? I've been told on this forum that short sales and foreclosures in NY area are more difficult because of all the additional paperwork required for NY RE transactions. Would that be the case for NJ as well?

We are curious about them as well, as we've seen a few RTO listings that look pretty decent, if not downright great... at least from the pics...
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Old 11-11-2011, 08:31 PM
 
1,320 posts, read 3,503,853 times
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Quote:
Originally Posted by jojoboulette View Post
I'm curious why you say this? Is it because of the lengthy process? I've been told on this forum that short sales and foreclosures in NY area are more difficult because of all the additional paperwork required for NY RE transactions. Would that be the case for NJ as well?

We are curious about them as well, as we've seen a few RTO listings that look pretty decent, if not downright great... at least from the pics...
I'm sure Marc will correct me if I'm wrong. Any shortsale is never easy or quick as banks will need to approve it and not to mention if there is more than one lender, they all need to agree. Banks also bury you with paperwork, some sellers and/or buyers don't qualify...also bank may no longer own your mortgage because they sold it but are servicing it but only to realize this wayyy later which gets even worse as one institution sold the loan itself to another and another so forth.

Also time to time and depending on cases, banks make more money not doing a shortsale and eventually foreclosing on the property. Depends on value of mortgage vs. servicing fees they make and at times...they have stupid reasons like shortsale process is taking too long, might as well foreclose and dump it in auction to get it rid of our books.

There are many nightmare scenarios which do happen so it's matter of making things more or less complicated. Buying home is already emotional, long, and complex process...you throw in one of these scenarios to make it even more complex, more emotional, and much longer...its not something many people are willing to endure.
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Old 11-11-2011, 08:45 PM
 
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Originally Posted by babo111 View Post
I'm sure Marc will correct me if I'm wrong. Any shortsale is never easy or quick as banks will need to approve it and not to mention if there is more than one lender, they all need to agree. Banks also bury you with paperwork, some sellers and/or buyers don't qualify...also bank may no longer own your mortgage because they sold it but are servicing it but only to realize this wayyy later which gets even worse as one institution sold the loan itself to another and another so forth.

Also time to time and depending on cases, banks make more money not doing a shortsale and eventually foreclosing on the property. Depends on value of mortgage vs. servicing fees they make and at times...they have stupid reasons like shortsale process is taking too long, might as well foreclose and dump it in auction to get it rid of our books.

There are many nightmare scenarios which do happen so it's matter of making things more or less complicated. Buying home is already emotional, long, and complex process...you throw in one of these scenarios to make it even more complex, more emotional, and much longer...its not something many people are willing to endure.
Hi, thanks for responding... I'm quite familiar with short sales and foreclosures, having been through one of those myself. They're not as bad as everyone makes them out to be, IMO. Personally, I think it's a great way to get a deal on RE, depending on the property. I can tell you that our buyers were very happy with the deal they got... And if you read the headlines, there is only more opportunity on the horizon, nationwide, as far as purchasing a home via SS or F.

I'm hoping the other responder will reply, as I'm still not clear as to why they are saying the RTO process is difficult. I'm more concerned that it's actually a ripoff for the buyer. Better to simply pursue a short sale or foreclosure purchase, from what I can tell.
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Old 11-11-2011, 08:46 PM
 
Location: Northern NJ
7,410 posts, read 7,372,780 times
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Quote:
Originally Posted by babo111 View Post
I'm sure Marc will correct me if I'm wrong. Any shortsale is never easy or quick as banks will need to approve it and not to mention if there is more than one lender, they all need to agree. Banks also bury you with paperwork, some sellers and/or buyers don't qualify...also bank may no longer own your mortgage because they sold it but are servicing it but only to realize this wayyy later which gets even worse as one institution sold the loan itself to another and another so forth.

Also time to time and depending on cases, banks make more money not doing a shortsale and eventually foreclosing on the property. Depends on value of mortgage vs. servicing fees they make and at times...they have stupid reasons like shortsale process is taking too long, might as well foreclose and dump it in auction to get it rid of our books.

There are many nightmare scenarios which do happen so it's matter of making things more or less complicated. Buying home is already emotional, long, and complex process...you throw in one of these scenarios to make it even more complex, more emotional, and much longer...its not something many people are willing to endure.
Nothing to correct, this pretty much nails it.
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Old 11-11-2011, 09:05 PM
 
Location: Northern NJ
7,410 posts, read 7,372,780 times
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Quote:
Originally Posted by jojoboulette View Post
Hi, thanks for responding... I'm quite familiar with short sales and foreclosures, having been through one of those myself. They're not as bad as everyone makes them out to be, IMO. Personally, I think it's a great way to get a deal on RE, depending on the property. I can tell you that our buyers were very happy with the deal they got... And if you read the headlines, there is only more opportunity on the horizon, nationwide, as far as purchasing a home via SS or F.

I'm hoping the other responder will reply, as I'm still not clear as to why they are saying the RTO process is difficult. I'm more concerned that it's actually a ripoff for the buyer. Better to simply pursue a short sale or foreclosure purchase, from what I can tell.
Every deal is an individual animal, so each must be investigated on its own merits. RTOs are difficult to structure in a declining market. What price do you exercise the option at? Today's value? Or the reduced value at the end of the lease? And why is the seller bothering with this in the first place? Because he cannot sell the home at market value for some reason. Usually the reason is he's under water. Else why waste time with a tenant who can't buy right now, and who may not qualify again for years, and deal with vacancy risk should the tenant fail to perform, and deal with market risk should values drop, and get involved with the whole mess in the first place?

Even in today's slow market, a well-priced home that is properly marketed sells very quickly, and even will have multiple offers at times. There is no reason to mess with tenants in a landlord-hostile state like NJ and "renting to own" or other gimmicks. Simply sell. So when a seller does not follow this direct and easy route, there is usually a reason, and the reason is often not pretty. Most homes that are for rent and for sale are simply upside down, overpriced pipe dreams that are really just for rent. In most cases, the lease is what actually happens, and the seller simply delays the inevitable: selling at a steep loss or worse: foreclosure.

As to the simplicity of short sales, there are a few easy ones and a few thousand tough ones. I do not list short sales, nor do I work with short sale seeking buyers. Why? Well, for starters I kind of like to make more than minimum wage...
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Old 11-12-2011, 05:52 AM
 
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I knew a person that did a rent-to-own. The rent, the amount applied to the purchase price while renting, purchase price, and the date of purchase was all determined before he moved in. It was all done with a lawyer. It has to be a win-win for both parties...if he didn't buy the house at the date and amount that was previously agreed to, all monies that would go towards the down payment (through renting) would not have been returned to the renter.
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Old 11-12-2011, 11:01 AM
 
Location: NJ
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Quote:
Originally Posted by jojoboulette View Post
Hi, thanks for responding... I'm quite familiar with short sales and foreclosures, having been through one of those myself. They're not as bad as everyone makes them out to be, IMO. tell.
Head on over to the real estate forum and read all the nightmare threads about short sales. Perhaps you just got lucky.
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