There are certain situations where it isn’t possible to wait several months to sell a home. Sometimes, we can’t wait to stage, prep, show, negotiate, sell, survive due-diligence, and wait to get a check.
Below are 4 reasons to sell your home with Rent-to-Own:
#1. You Have No Equity In Your House
Many times, we look for a house to buy in a convenient location and we pay a large sum of money for it. Sometimes market value decreases and when it comes time to sell there has been no significant decrease of the loan balance and no appreciation. This means that your mortgage balance isn’t far enough below market value to pay the costs of selling a home.
Keep in mind it will cost you money to sell the house and you will have to write a check at closing. All the expenses can easily add up to 10% of the purchase price of the house. If your house is worth $150,000 then it can cost you as much as $15,000 to sell it! A rent to own will allow your mortgage to decrease and the value increase so you will be able to sell it at a profit in the future.
#2. Your House Is Underwater
“Underwater” means that your mortgage balance is more than the market value of the home. For example, if your mortgage balance is $160,000 and your home will only sell for $150,000, this would mean the home is $10,000 “underwater”. Using a rent to own will allow mortgage pay down and appreciation to cure this problem. It would not be possible to sell a house fast in this situation without losing money!
#3. It’s About To Become Vacant
Some home owners may have bought or rented another house in another state. This can result in huge holding costs of having an empty property. You have the mortgage payment, which includes principle, interest, taxes and insurance “PITI”. HOA dues will need to be paid if the home is in a subdivision. Utilities such as electricity, gas, water, and sewer, need to be kept on so the property can be “shown” to potential buyers or even renters. The yard will have to be maintained which will result in landscaping fees. These costs add up very quickly. If enough money is not put in reserve to maintain the property your money can run out quickly! This becomes a vicious circle; money gets tight so the lawn becomes over grown which results in fines from the HOA, the city, or both. The home goes into disrepair and becomes unsightly losing any curb appeal. Potential buyers are turned off by the homes appearance and will not make an offer on it. The city of Raleigh N.C. enforces this very aggressively and can fine home owner as much as $500 for an overgrown lawn. This is an emergency sell my house fast situation!
#4. No Money For Repairs
This occurs when the property falls into disrepair because of money problems. Usually, overgrown lawns filled with weeds, stained carpet and flooring, heavy amounts of mold and mildew in the wet areas, vinyl flooring curling at the edges, worn and crooked cabinetry in the kitchen, outdated and dirty plumbing fixtures, tubs, shower stalls, etc. The biggest expense would be a leaking roof or broken air-conditioning unit. These two are the most costly. A new roof can cost between $4,000 and $10,000 depending on the roof and how much of it needs repair. These types of repairs will scare off almost all retail buyers. Remember, buyers are picky!
I hope these quick tips will help empower you to make an informed decision on whether my rent to own program is right for you. If you’re saying to yourself: “I need to sell my house fast!”, then do not hesitate! Call me right away. Please keep in mind that the process of a rent to own is complex and should be completed by an experienced professional only!