Can't Sell Your Home? Why Not Rent it?

Can't Sell Your Home? Why Not Rent it?


It may not always make sense to sell your home. If that's the case, renting it could be a good option. But understanding the rental process and using expert help will alleviate extra stress.

Dr. Danielle Babb is the author of The Accidental Landlord. She shared five top tips for homeowners who are considering renting their home.

Emotionally disconnect from your home. As you can imagine, this can be a very difficult thing to do -- especially if you've lived in the house for a long period of time and maybe your kids have grown up in it -- but it's an important step.

“It can cause some emotional distress and you may find yourself too attached for the new tenants liking and their privacy rights. When you make the decision to rent out your home, it needs to feel similar to how it would if you were selling it to someone else,” says Babb.

Screen your tenants. Don't fast forward to thinking about having wonderful tenants in your home so much that you skip over the screening process. Attending to this process alone, can eliminate huge headaches in the future.

Babb cautions landlords about scams aimed at landlords who don't screen. “There are actually "professional tenants" out there that do nothing but find susceptible landlords, usually those renting without a management company, that don't screen tenants. They will give a deposit, and live rent free (not paying rent), knowing you won't know what to do or how to kick them out,” says Babb.

She outlines several steps in her book that help landlords learn more about removing tenants but she says, “The most important thing is not to let the bad ones in to begin with.”

Babb says in her book as well as on the Landlord Protection Agency website there are screening worksheets that help landlords know what types of questions to ask and what red flags to look for.

“For instance, are they not taking care of their car? Maybe they won't take care of your house either and make sure you call those references! Compare what they tell you to what is on their credit report, and make sure you do a credit and background check. Know who you are renting to, and don't be afraid to say no,” says Babb.

Know the law. There are specific laws to protect the tenant. How much the tenant is protected differs greatly from state to state.

“The laws you must abide by are the laws the home is in. You have to tailor your lease or rental agreement to that state's rules. You can easily find these on the Landlord Protection Agency site and then modify the lease agreement accordingly,” says Babb.

To learn more visit the LPA: thelpa.com

She says, “Common changes are how much notice you must give for them to vacate, the maximum deposit you can collect, and notifications for entrance.”

How much rent? “It's easy to say, 'Okay, I have $2000 in expenses, Ill charge $2100,'” says Babb.

But just like when selling your home, it doesn't work that way.

“The market may only bear a rental comp of $1500. You have to make the decision if that $500/month is worth the long-term gain or whatever your initial reason was for holding rather than selling,” says Babb.

Real estate agents can be a great resource for helping to determine what the best rental price should be. They can show you homes in the area that are also for rent and, just as when selling, taking a look, or at least, driving by the homes gives you an idea about the competition.

“You may get more if you leave it furnished; sometimes you can lease furniture and up-charge and make a profit on it, particularly in areas where young families are starting out or college students frequently live. Just be sure you price it right -- all of those extra months on the market eat into that profit or breakeven point. No matter what, be sure you collect a sufficient deposit -- usually one months rent, plus a pet deposit and additional monies for other reasons, like appearing to be a risky tenant,” says Babb.

Who is responsible for what? Important, but tricky question. Depending on which side of the fence you sit, you, of course, may see this differently.

Babb says, “If something breaks, you have an obligation and lawful duty to fix it immediately if it affects quality of life or poses a hazard. But, if the tenant just wants something upgraded, that isn't a requirement. You have to walk the line between having your tenant stay long term because you're easy to work with and paying too much for little things. You can let the tenant make upgrades that they pay for if you wish.”

Babb adds that incentive programs also help a good tenant to stay longer. “For instance, I give my tenants a discount off rent coupon if they pay 5 days early and pay direct deposit. This saves me considerable time.” She says landlords should beware of partial rental payments such as a tenant paying only $100. “If a tenant sends you a partial rental payment, say for $100, and you cash it, it may start the clock ticking all over again on evictions! These are the types of things that professional tenants do.”

Renting doesn't have to be a scary process; it does have to be a well-researched and carefully planned process to ensure the best outcome for all.


If you are interested in renting your home feel free to call or email me. We have a top notch property management division.

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The Online Business of Being Social!

The Online Business of Being Social

There’s no question that the Internet has revolutionized the business of real estate. According to the 2008 National Association of Realtors® Profile of Home Buyers and Sellers, nearly nine out of 10 recent buyers used the Internet in their home search. But now, a new revolution is taking place. A small but growing number of home buyers are taking advantage of social networking Web sites like Facebook and MySpace, as well as video hosting sites such as YouTube when searching for a home, and according to [your association name], Realtors® are using these tools to reach today’s home buyers and sellers.

“Realtors® are industry innovators. At its core, real estate is grounded in relationships, and social networking combines the high-tech of new technologies with the high-touch of real estate. It makes sense that Realtors® are leveraging these new resources to help them connect with buyers and sellers.”

A recent Harris Poll revealed that 48 percent of adults who are online have a Facebook or MySpace account. While many maintain these accounts for personal use, others use them for professional networking. For example, the National Association of Realtors® has its very own Facebook page with just under 15,000 fans. NAR’s research department also has a Facebook page where both Realtors® and consumers can access the latest research and data findings.

Blogs are another popular social networking tool Realtors® use to share information and keep themselves informed on the latest news affecting the industry. On sites like ActiveRain, Realtors® can share useful tips and industry insights with potential buyers and sellers. Realtors® also post blogs on REALTOR.com; consumers can find blogs from Realtors® across the country at http://talk.realtor.com/.
“Given the Internet’s convenience and round-the-clock accessibility, it’s not surprising that more and more consumers and Realtors® are connecting online. As the social networking universe expands, Realtors® will continue to find innovative ways to serve their clients and customers, and build their businesses.”

“The best thing about social media is it can be tailored to fit the needs of the user. At its most fundamental, online networking is simply another way to communicate, and Realtors® have an opportunity to make it work for their businesses and lives.”

Defending Your Home Against Foreclosure

Defending Your Home Base Against Foreclosure
by Matt Englett

Throughout Florida, we see the number of foreclosures continue to rise. While Winter Park may have been more stable when the housing crisis began, the community is now feeling the impact of the foreclosure wave that is washing over our state and nation.

A recent report by RealtyTrac, Inc. found that Orlando's four county region, including the city of Winter Park, had nearly 8,000 homes with a foreclosure filing, notice of foreclosure or repossession by a lending group. This figure has doubled since last year's data collection. Now, more than ever, I hear from worried homeowners asking questions like: "What should I do if I can't pay my mortgage?" and "What should I do if I'm served a foreclosure notice?" People think there is little that can be done to defend against foreclosure. Good news that is absolutely not true.

Understand that many people, including elected officials and community groups at all levels, are working tirelessly to slow the rate of new foreclosures. There are, however, a few attempting to take advantage of scared, inexperienced homeowners who are faced with losing everything. My Advice: don't be afraid, get informed.

The most critical first step for individuals faced with mortgage foreclosure is to find and secure the services of an experienced attorney, familiar with these issues. A foreclosure filing should be viewed like a lawsuit, and you'll need someone who can successfully litigate your case. A thorough understanding of your mortgage right, which include, but are not limited to, loan modifications, is of the highest importance.

Be wary of non-attorneys offering assistance as they have no leverage in dealing with lenders. In the end, they cannot do anything to help their clients if a foreclosure case goes to court. Lenders have become keenly aware of this deficiency, and they will exploit your team's weakness.

There are a number of benefits linked to working with a reputable foreclosure attorney who can who can lead a dynamic defense. Your attorney will work to delay or stop foreclosure, and you will be able to set aside funds that can be used when seeking reinstatement. Furthermore, people who put up a strong defense have an extra leverage and are well positioned for future reinstatement. Working with a defense attorney, borrowers affected by foreclosures can use the legal process to achieve fair loan modification – a solution that allows people to keep their homes. This route reworks the terms of an existing mortgage, thereby lowering monthly payments and making the loan more affordable.

This can play out in various ways, including; the principal balance of the loan can be reduced; the interest rate lowered, and some or all of the past-due payments can even be eliminated. Essentially, homeowners get a new start on their credit report and improve their credit scores over a matter of months. Each situation is a different, and you must work with your trusted advisers to decide the best course of action for you and your family.

While the process may seem overwhelming, the bottom line is … a reputable attorney will be able to set you on the right course toward keeping your home. If you're in trouble, unable to make your mortgage payments or if a foreclosure complaint has already been filed against you, please do your homework and find experienced legal representation.

Matt Englett is a foreclosure defense attorney with the Orlando based firm of Kauffman, Englett And Lynd. He can be reached at 407-513-1901.

Buyers and Sellers get on the Same Page.

Buyers and sellers get on the same page
While property values down, pricing is no longer high-stakes game of roulette

By Candace Taylor
Zhann Jochinke, an associate broker at Argo Residential, put an alcove studio on the market last year for $525,000. But the offers that came in were as low as $390,000.

"People were putting bids out there just to see if the person had to sell," he recalled.

More recently, however, he convinced the seller to drop the price to around $490,000.

Offers began coming in at "5 percent or less off the asking price," he said. Now, the listing is in contract, and expected to close in the next month.

After months of uncertainty, Manhattan buyers and sellers are finally making a market. In the terrifying period after the Lehman Brothers crisis, so few properties were sold that pricing an apartment became a game of roulette. Buyers, too, were unsure what a property would trade for, and their offers were all over the map.

Plummeting prices made matters worse.

"Earlier in the year, recent comps were being considered, and then 10, 15, 20 percent was being subtracted to set a reasonable asking price," Jochinke said. "It wasn't uncommon, even at these prices, that offers would still come in well under ask."

But thanks to the uptick in activity that started in the spring and has carried over into fall, a new batch of closed sales is providing much more accurate information, allowing both buyers and sellers to get a clearer understanding of how much their properties are worth.

"We are able to list a property today at a number very similar to one that closed in the past couple of months," Jochinke said.

As a result, Antonio del Rosario, the president and co-owner of A.C. Lawrence, said he's now seeing accepted offers come in within 2 percent of the asking price, or "many times, at the asking price," he said, adding, "I'm seeing a lot of sellers align with the market."

A nearby example is Bernie Madoff's five-bedroom mansion in Montauk, which reportedly sold last month for more than its $8.75 million asking price.

The shrinking gap between buyers' and sellers' expectations makes it easier to put listings into contract, said Michael Garr, a senior vice president at Core.

"There is a tremendous increase in competitive offers from savvy buyers, which have resulted in more listings in contract," said Garr, who recently held an open house for a two-bedroom co-op at 105 West 13th Street in Greenwich Village that attracted 21 people. "Five months ago, I would have had half that number," he said.

Make no mistake: these deals are trading at lower prices than last year. But properties that have languished on the market for months are now beginning to move.

For example, last month, the Manhattan-based brokerage Marketing Directors sold a three-bedroom penthouse at the Platinum at 247 West 46th Street, a listing that first went on the market in September 2008.

According to city records, the selling price was $5.8 million -- down about 17 percent from the original asking price of $7 million.

"If both parties are realistic about the market, deals are being made," said Jacqueline Urgo, president of Marketing Directors.

As a result, inventory has not risen as precipitously as some had feared it might.

According to Jonathan Miller, the president of the appraisal firm Miller Samuel, there were 8,535 homes on the market in Manhattan at the end of August. That's 4 percent more than the same month last year.

However, it's 22 percent less than six months ago, when there were some 11,000 homes available for sale, he said.

"There is still a lot more on the market than there was two years ago," said Ric Swezey, a senior associate at the Corcoran Group, "but the market has stabilized from this time last year, which has allowed some of the inventory to be absorbed."

It's still anyone's guess how much prices will fall as the recession continues. But brokers report that the steep drop-off in prices that characterized the immediate post-Lehman aftermath seems to have stopped -- for the time being, anyway -- giving buyers and sellers enough breathing room to comfortably make purchases.

"I can confidently say pricing has finally stabilized," said del Rosario of A.C. Lawrence.

However, he cautioned, "I don't know how long it will last, since we have yet to see unemployment rates reach a plateau. Until that part of our economy has stabilized, I don't think the housing market in [New York] or in any part of the country can stand on solid ground."

Experts agree with del Rosario that unemployment and other market fundamentals remain weak, making a speedy return to the boom years -- and prices -- of the mid-2000s very unlikely.

Also, even as buyers exhibit renewed confidence and interest in real estate, strict lending requirements are slowing the buying process.

"Our contracts and closings are up, but there is still no financing," said Marilyn Harra Kaye, president of MLBKaye International Realty, adding that buyers have been asking, "When will the FICO [credit] scores come down to get financing?"

The continued underlying market weakness is most evident in the higher-end market, which has been particularly hard-hit by the lack of available jumbo mortgages.

"The weakest part of the market continues to be homes priced above $2 million," said Steven McArdle, the principal of Urban Marketing. "However, I'm seeing tremendous activity in homes priced at $1.5 million and below."

Also, on the very high end of the market, some listings are beginning to change hands, or at least generate new interest (see "Trophy listings at lower prices"). Early last month, news broke that a townhouse at 165 East 70th was sold in August for $13.5 million to John Mack, the CEO of Morgan Stanley.

The rental market is exhibiting similar trends, with activity greater than it was in the immediate aftermath of Lehman's collapse.

In its first-ever peak-season rental report, released late last month, Citi Habitats found that average rents across Manhattan -- excluding incentives -- dropped by more than 8 percent between May and August 2009, compared to the same four months in 2008. Studio apartments and two-bedroom apartments showed the steepest drop, at 11 percent.

Another rental report, prepared by the brokerage TDG/TREGNY, found that rents for all categories of apartments had dropped between 6 and 10 percent from September 2008 to last month.

"While activity has increased, the numbers have not shown significant improvement," the report said. "Rents have stabilized, but at levels nearly 10 percent back from already depressed 2008 numbers.

"And although vacancies showed improvement this month, they have yet to establish the trend necessary to absorb the considerable amount of excess inventory that is continuing to depress the market."

Overall, brokers are breathing a sigh of relief, as business appears to be getting somewhat back to normal. But they acknowledge the market is not out of the woods.

"The general sentiment is that we still have a long way to go, but any future declines in the market will be slower and less of a free fall," said Kristin Hitsous, an associate attorney at real estate law firm Rosabianca & Associates.

4 Ideas for Selling Real Estate in a Slow Market

Author: Joshua Dorkin
http://www.biggerpockets.com/ August 25th, 2006

The CBS Early Show interviewed Wall Street Journal reporter June Fletcher, who covered four helpful ideas for selling your home.

1. SET YOUR PRICE REALISTICALLY
“Look at what other similar houses in the neighborhood are selling for and then set your price at 10 percent under the market. . . This is a counterintuitive move,” she admits, but, “by setting your price 10 percent under the market, your home will get more attention. You’ll get more people looking at your home and you’ll create a sense of urgency to get people to act to buy. This urgency, and a greater number of people looking at your home, drive up the price by creating a bidding war for it.”

2. MAKE MEMORY POINTS
“What is a “memory point”? Fletcher calls it “that special detail that is memorable and sets your house apart from the others. It makes your house memorable. Everyone has granite counters these days. So, you might want to install a concrete one for a fraction of the price. And, it will be distinctive. ”

3. USE UNUSUAL ADVERTISING MARKETS
“Think of publications that don’t usually have real estate ads, such as alumni magazines, hobby magazines, train magazines, places you wouldn’t usually think about, but where your ad will really stand out.”

4. ADVERTISE ABROAD
“No matter what happens in our economy, our homes are still a bargain to people in other parts of the world like Germany and Japan. Learn to think globally.”

If your thinking of buying or selling your home feel free to call me.
Michael Scearce
336-209-0049

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