Sunday, November 30, 2008

What Does Rent to Own Really Mean?


In a lease-purchase, you are effectively a renter for some time until you decide to purchase the home. While you lease the property you have to review the document in light of the landlord-tenant relationship. You have to decide who will have to pay for the cost to maintain the property with a view towards those major components of a home that can have problems and then deal with the minor maintenance items.

As a tenant of the property, you need to remember that you do not own the property. You should not invest in the home, make improvements to the home or spend much money on the home until you decide to buy the home and exercise your rights under the lease-purchase and have closed on the home.

When the document deals with the purchase side of the deal, you need to be quite careful. If you are putting money down to assure your seller that you will buy the home, you need to know that your down payment is safe. You also need to make sure that the seller will have the ability to close on the deal when you decide to exercise your rights to purchase the home.

So what do you need to look out for? As a general rule, you need to make sure that the person you are dealing with owns the home and can sign documents with you as both landlord and seller of the home. You also have to negotiate the manner in which the owner will take care of the property and won't take actions that will disturb your living in the home. It won't do you much good to live in the home if the seller treats the home as his and deprives you of your privacy and joy of living in the home.


The owner has to maintain the home until you close on the purchase. If you take care of the ordinary and routine maintenance of the home, your documentation needs to set up a mechanism for you to make sure that (1) the owner has homeowners insurance to pay for damage caused to the home by a casualty, (2) the owner is current on his mortgage payment to avoid losing the home to the lender, and (3) the owner is current on his real estate tax payments and homeowner association fees and dues to avoid losing the home to the taxing authorities or association.

If the owner fails to keep any of these items current, you could find yourself homeless in the future even if you have been a model tenant.If the owner maintains the home, pays the real estate taxes, mortgage and homeowner association payments, you should be in a good position to close when you decide to purchase the home in the future.

But you also need to treat the home as a purchase at some point in time; your documentation for the lease-purchase might require the seller to provide you with a title insurance report. Depending on the lease-purchase arrangement and how serious you are about buying the home, you might be better off knowing early on whether anything affects the title to the home now rather than later.

If you lease the home and wait a year or two to review the title to the home, you might be surprised by what you find. While you might not be obligated to purchase the home if the title report shows something you don't like on the title, you will not have wasted a year or two in a home you can't or won't purchase.

Lastly, any money held by the seller for the purchase of the property should be held by a third party that can hold the money and would not disburse that money until the deal closes, or if you decide not to purchase the home, the deal dies and you move somewhere else.These are just some of the issues to look out for; work closely with your real estate professional when you are drafting the documents to avoid any surprises later on.

For answeres to all your real estate questions feel free to contact bill.swanson@cbshome.com.

Saturday, November 29, 2008

Bill's Pick For Places to Go This Holiday Season

Looking to get out for a night of fine dining and champagne? Well, don't look here.

However if you want a place to escape the holiday shoppers or just need to get out of the house for awhile this is your spot. Aptly called The Forgot Store, this friendly place for drinks and greasy food will be sure to become one of your favorites. It even has a little grocery store in the front so you can pick up that gallon of milk you told the wife you were going out for.

You can find this hidden cove at 11909 Calhoun Rd, between Ponca and N 48th Street in North Omaha. Be sure to tell the bartender that Bill sent you!



Friday, November 28, 2008

$7,500 Homebuyer Tax Credit May be the Path to Homeownership


When you combine the tax credit with today’s low interest rates, wide selection of inventory, and affordable home prices, many of the pieces are in place for you to buy now.
Here are 6 things you should know about the $7,500 how ownership tax credit:

1. Buyers have until July 2009 to make a purchase that qualifies.The tax credit was passed in July of this year as part of the Housing and Economic Recovery Act (H.R. 3221). It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009.

2. Buyers don't really have to be "first-timers."The tax credit is actually available to any individual or household that hasn’t owned a home for at least three years.

3. Even if buyers exceed the income limit, they can benefit from the credit.The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500. Sounds like a great deal. But what if you make more money than the income limit of $75,000 for individuals and $150,000 for households? Good news: Individuals whose income exceeds the $75,000 limit but don't make more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000. By the way, any house is eligible as long as it’s a primary residence and is in the United States.

4. Think of it as an interest-free loan.The federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable.
5. You don't have to be authorized before making a home purchase.There is no pre-purchase authorization, application, or other approval process. Eligible buyers simply have to claim the credit on their IRS Form 1040 tax return and/or any form that the IRS might devise.
6. New-home construction qualifies.For a home that a buyer constructs, the purchase date is the first date the buyer occupies the home.However, any home that is not a primary residence, such as a vacation home or income property, does not qualify.

For more information contact bill.swanson@cbshome.com or visit http://www.billswanson.com/.

Thursday, November 27, 2008

Thanksgiving Day Puzzle


Here's a little puzzle for Thanksgiving.



Follow each step in the directions very carefully. Then write the new result. When you're finished, you'll discover a phrase that describes something we all do at Thanksgiving!






1. Begin with THANKSGIVING - THANKSGIVING



2. Remove all the vowels - THNKSGVNG



3. Add the word COB between the second and third letters from the left -



4. Remove the third and sixth letters from the right -



5. Switch the fourth and fifth consonants from the left -



6. Add the word LESS between the fourth and fifth letters from the right -



7. Move the fourth letter from the right so that it is the first letter from the right -



8. Add the word BUY after the fourth consonant from the left -



9. Remove the sixth letter from the left -



10. Add the word OUR after the letter Y -



11. Remove the second letter from left -



12. Change the forth letter from the right to an I -



13. Move the first letter on the left so that is becomes the fifth letter -



14. Switch the second consonant and the second vowel from the left -



15. Add spaces after the fifth and ninth letters -


Answer is a 3 word phrase.


Happy Thanksgiving Everyone!

Wednesday, November 26, 2008

A Thanksgiving Treat From The Fed's



Happy Thanksgiving – Mortgage Rates Plunge Finally, some good news for the mortgage industry!


In a move to increase credit availability, the Federal Reserve and Federal Home Loan Banks announced that they would purchase up to $600 billion in Mortgage-Backed Securities (MBS), exciting news that sent interest rates for 30-year fixed-rate mortgages plummeting below 6.00% and near the lows for the year!

If you have been on the fence about buying or refinancing a home, now is the time to act. Interest rates are extremely low and home prices in some areas are at 2003-2004 levels. Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success. And don't forget about the bonus that will come after the holidays - the $7,500 homebuyers tax credit!


Don't wait too long to make a move. Rates have already been very volatile and this opportunity might not survive the holidays. In many markets, falling prices are bringing out buyers that have been waiting to buy and they are scooping up both bargains and hot properties.


For more information about real estate in your area contact Bill Swanson at bill.swanson@cbshome.com or visit www.billswanson.com.