I am the exclusive agent in Wenatchee for a Lease-To-Own program that is an excellent option for people wanting to buy a home, but can't qualify due to:
  * Short Employment History
  * Insufficient down payment monies
  * Poor Credit
  * Other reasons


I get a lot of inquiries about this program, so let me give an outline of how it works.

The program I represent prequalifies applicants based on income, not credit scores.  We do review the credit report and credit scores, but it's not how we qualify people.   Once we verify the applicants income, we can establish a "price range" for people to shop in.  Not everyone qualifies.  If they don't make enough income to purchase a decent house in our market we can't help them.    


You wouldn't believe the people who call off of rent-to-own ads thinking they're going to get a great house for cheap and all the rent goes toward the purchase.  It's not going to happen.  I have people who want to spend $450 per month to buy a house.  That  will barely get a crummy apartment and certainly won't buy a decent house.  It might buy an old manufactured home on leased land but, as I explain below, we don't deal in manufactured homes for the rent-to-own program.   It doesn't work due to slow appreciation factors


I advertise lease-to-own properties every day.  The easiest way to explain it is to give a sample conversation with a caller to illustrate how I do lease-to-owns.  (Disclaimer: Wanda WannaBuy is strictly a fictional character for illustration purposes only):


Phone: Ring-a-ding-ding (or in my case music to "Take Me Out To The Ball Game")


Cool Carol:  Hello.  This is Carol

Wanda WannaBuy:  Do you have any rent-to-own homes in East Wenatchee (as compared to Wenatchee or other surrounding cities).

CC:  Yes, I have over 37 lease-to-own homes to choose from in East Wenatchee.  

WW:   REALLY?  How much do they cost?

CC:  I have  lease-to-own homes in all price ranges starting at $110,000 on up to over $300,000

WW:  Can you send me a list?

CC:  No.   First we need to pre-qualify you for a price range.  I am assuming you want a lease-to-own home because you can't qualify for financing at this time.  Is that correct?

WW:  Yes.  I went through a divorce and my ex-husband spent all of our money and ruined my credit

CC:   O.K.  We can deal with that.  Let me summarize how the program works and if it sounds interesting, I will have you call the guy who pre-qualifies buyers for me.  Does that sound good?

WW:  Yes

CC:  We qualify you based on your income, not your credit score.  Once you are pre-qualified for a price range, you and I go out shopping for a home.  You can pick any home you want (that is listed for sale) in your designated price range.

WW:  REALLY?  (They get very excited about that)

CC:  Yes.  Once you pick the home YOU want, I have an investor buy the home for you and they (the investor) put you in the home on a two-year (pre-arranged) lease/purchase agreement.  Two years should be enough time for you to get your credit straightened out, right?

WW:  Yes

CC:   I will tell you, though, my investors will not buy manufactured homes.  They don't buy manufactured homes because they do not appreciate in value as quickly, or at the same pace, as regular stick built homes.  We want you to be in a home that will appreciate for you in the future and you can build equity.   Does this sound like a program that might work for you?

WW:  Yes

CC:  O.K.  Would you like me to have the guy who pre-qualifies my buyers call you or would you like to call him?

WW:  I will call him

CC:  O.K... here is his number.   Blah-Blah-Blah  


So, that's my initial conversation with them.  The ball is then in their court to call my  pre-qualifier.  They will either call the guy who pre-qualifies buyers or they won't.   If they don't it's probably because they know they don't have enough income to qualify.  
  

But, I also have people call who make $3500 - $8,000 per month.  I can help these people.  I won't go into all the details, but here are the highlights of the actual lease/purchase agreement.

The lease/purchase agreement is for two years.  One year is not long enough for most people. When they enter the program, they pay a $1500 retainer.  This does not go toward the purchase price.  It is for on-going support. The buy-out price is 110% of the investors purchase price.  I negotiate the best price possible upfront for the investor and provide comparable sales to justify the purchase price.   

So, considering we are in a market appreciating at over 16% per year, this is a great opportunity for the buyer.  It could even work at 5%.  Anyway, theoretically, a home purchased for $150,000 would be worth $198,000 in two years.  The buy-out price is $165,000.  The lease/purchase buyer should have $33,000 equity in the home when they go to get financing.    This could cover their down payment AND closing costs... AND it's treated as a re-fi because they've been living in the house for two years.     

The lease/purchase buyer's payments are based on a formula that pays all of the investors acquisition costs.... mortgage, taxes, insurance, ROI for downpayment, etc.  It's just as though they are buying the house themselves... but using the investors money and credit.  Of course the house isn't in the tenant/buyers name yet but they get to accumulate appreciated value during the lease period so it's easy to finance.     


The rest of the story, and the key to the exceptional success of the program is the tenant/buyers must agree to entering our credit consulting service.   The credit counselors go over their credit report with them and outline a plan to get them on track so they can pay-off debt, raise their credit scores (or whatever the issue is) and be ready to finance within two years.  They can buy any time within the two year period.  If they buy early, say after one year instead of two, they get a reduction on the buy-out price because the investor doesn't have his/her money tied up for so long.  


Does all of this make sense?  Can you see how this is a good alternative for rent-to-own buyers?  We have over an 80% success rate with this program and, in my opinion, it's because we don't let people get into more than they can afford and we make them accountable to do the things they need to do in order to get financing when the time comes.  


Oh... by-the-way, we can work this program with new construction (pre-sales) too.

Information is FREE.  Knowledge & Experience Are Priceless

Contact Carol today:  Carol@TopPropertiesWenatchee.com

www.TopPropertiesWenatchee.com

I continue to see a trend toward more price reductions and homes coming back on the market as a result of pending sales failing to close.  I'm not certain what the reason is for these failed sales, but they are most likely for one of three reasons:

1) Buyer does not qualify for financing

2) Home does not pass inspections, or repairs are too costly

3) Homes does not appraise for the sale price

In order to reduce the risk of any of these happening to you, here are some suggestions:

1) As a seller, insist on seeing a letter of pre-qualification (or better yet, a pre-approval) for your prospective buyer before you sign the Purchase & Sale Agreement.   As a buyer, get pre-qualified before you ever go house shopping. 

2) As a seller, have a home inspection done before you put the home up for sale, so there are no surprises for you or the future buyer.  This will cost a few hundred dollars, but could save you considerable money and anquish later in the transaction.  With a positive home inspection, you can price your home, and negotiate a sale, with greater confidence.    As a buyer, if the seller did not provide the results of a home inspection, have one done as a condition of the sale.  It's well worth the expense.

3) As a seller, have an accurate price analysis done by an experienced real estate agent, or an actual appraiser, so you are not misled as to the value of your home.   Most real estate agents will do a price analysis for FREE, with the hope of listing the property.  But, there is no obligation to list the property just because they do a price analysis (often referred to as a CMA).

If you have any specific questions about selling or buying a home contact:

Carol@TopPropertiesWenatchee.com

http://TopPropertiesWenatchee.com

http://www.CarolsWenatchee.com

The VantageScore system is a joint effort by THE three credit reporting agencies (Equifax, TransUnion and Experian) to simplify and enhance the process and results of consumer credit scoring.
Using a rating range from 501 to 900, VantageScore intends to provide a more consistent and accurate score to credit consumers and grantors, eliminating much of the discrepancies that have been evident among the three companies. 

This is a big improvement and will benefit home buyers in Wenatchee, Washington and throughout the nation.

Carol@TopPropertiesWenatchee.com
http://TopPropertiesWenatchee.com
http://RealEstateSuccess.blogspot.com

Not surprisingly, mortgage rates are inching up.  For daily updates on current interest rates, visit my Mortgage 101 site or Bankrate.com .  

Whether you're considering buying real estate in the Wenatchee area or some other part of the country, keeping up with the trend of current rates is useful.   When shopping for rates, the internet can be very useful but I, personally, recommend working with a banker or mortgage company in your local market.  You can use the information you gleen from the internet in negotiating with any lender, but I've found local mortgage professionals give more personalized service and are easier to communicate with than an unknown entity from some website.    Just as importantly, I have also found that loans are processed much more efficiently when utilizing local lenders who are familiar with the local market. 

Please contact me if I can provide additional information.

Carol@TopPropertiesWenatchee.com
http://TopPropertiesWenatchee.com

 

The other day, while driving, I heard an alarming ad on the radio.  The dialogue went something like this:
Male Voice #1:  This is the "happiest time of the year".
Male Voice #2:  What do you mean?  The holidays are over.

Male Voice #1: Yes, but I have all my credit card debt paid off.
Male Voice #2:  Wow... that is a happy thought.  How did you do that so fast?
Male Voice #1:  I refinanced my house and paid them all off immediately.

Then the ad goes on to tout how easy it is to refinance with Blah Blah Blah Mortgage Company.

* * * * * *

Oh my gosh!  Does anyone else see what's wrong with this picture?  This company is trying to make us think they are helping us pay off our card debt, when all we would be doing is refinancing them.    Under a typical fixed rate mortgage, we'd be creating a 30 year debt instead of a short term debt.   The only good thing about it is that mortgage interest rates are lower than almost any credit card. But, the only way it's going to be an overall advantage is by paying enough extra on the mortgage payment to bring down the principal in the short term.

Carol@TopPropertiesWenatchee.com
Search Properties on my primary website

Bankrate.com has an interesting article, with a link to compare closing costs in your state to those in any other states.  "Closing costs" include a long list  of various charges for securing a mortgage, or when refinancing a home.  The total of closing costs can really drive up the cost of buying a home, so it's worth paying close attention.  I recommend you check out the article and use it to your advantage when you are shopping for a mortgage.    Here is a direct link to a sample closing cost list in Washington state.  

When shopping for a mortgage, whether it's in Wenatchee, Washington or any other city in the country... the closing costs are a significant factor in determining the actual cost of your mortgage. 

On my main Wenatchee real estate website there is a link to a short, yet interesting, article about the top 10 reasons mortgages are declined.   Surprisingly, the number 1 reason was "no credit file", meaning the applicant has not established enough credit because they pay cash for everything.   The article also cautions about co-signing loans for another person.  To read the full article, click here. 

Have a great day!
Carol

I picked up the August issue of Consumer Reports  today because it has a cover story on Your Credit Score. It says..." What you don't know can really hurt you".    I tend to gravitate toward articles like this, because your credit score has a big impact on how much a home will ultimately cost you... or whether you can get a loan at all!  

Credit scores are now being used for far more than getting a loan, though.  They impact how much you pay for insurance, rates on credit cards, how much of a deposit you'll have to pay to get electricity turned on... and even whether or not you get a job.  So... whether you're buying Wenatchee real estate or signing up for electricity in a new city, your credit score matters!

Anyway, it's a fairly comprehensive article, and worth checking out.   If you don't want to buy the magazine, most libraries will have a copy for your FREE reading pleasure. 

In the same issue, there is an article about bathroom remodeling...  how to create a luxurious environment on a budget.   Countertops, sinks, whirlpool tubs, showerheads, and toilets are all covered. 

Have a great week!
Carol