Judy Moore - Barrett Sotheby's International Realty



Posted by Judy Moore on 5/13/2018

If you donít have a lot of cash on hand to secure a home with a sizable downpayment, you might feel stuck. Itís quite a feat to be able to save up the 20 percent cost of a home that is generally required to purchase a home. Your options may seem limited when you want to own a home. There is one option that could be a good idea to consider when youíre in this situation. Thatís the idea of finding a rent-to-own property. 


How Does A Rent-To-Own Property Work?


First, know that these properties are hard to find. Thatís why you may not have thought of it as a first option. When you do find a property like this that suits your needs, you should know all of the ins and outs before you commit to the home. The agreement works just as it sounds, but there are always a few bits of extra text that can make the difference in any agreement in a rent-to-own property. 



Lease With A Purchase Option


With this type of agreement, youíll need to pay what is called an option fee in order to give you the right to purchase the property at a later date. The seller is then required to sell the property to you as a tenant and apply the option fee to the price of purchase. If for some reason you have paid the option fee and decide to walk away from the property after a time, the money that you have paid as an option is simply lost. The option fee is usually a percentage of the purchase price ranging anywhere from 2-7 percent of the homeís price.  


Lease And Purchase Agreement Rolled Into One


In this type of rent-to-own agreement, both the tenant and the seller agree on fixed purchase price for the home, or agree that a purchase price will be determined at a later date through an appraisal. Everything is set up from the beginning including the closing date for the home.


This type of deal in a rent-to-own situation is often considered the better choice. Know that a fixed price option may put you in a better financial position than an appraisal option. Youíll have instant equity in the property when you buy it. This is especially helpful in high competition markets. In any other types of market, you may be better off with an appraisal. This ensures that you donít overpay for the house.


How Your Rent Payments Apply


Rent-to-own gives you an advantage in that you get the added benefit of rent credits. This is where a percentage of your monthly rent payment is applied to the purchase price of the home. The amount of percentage thatís applied will be agreed upon with your landlord ahead of time.


While a rent-to-own option to purchase a property can be a bit more complicated than other ways of purchasing a home, it can be a great way for people different financial situations to become home owners. Make sure you go over everything carefully before you sign anything so that you fully understand the agreement youíre entering into.       

     







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Posted by Judy Moore on 2/28/2016

For the past several years there has been some confusion over whether it has been a better deal to rent or buy a home. Buying has always been the best long term investment. With the changes in the market it is now clear that in almost any situation buying is the best bet. Rents over the past few years have been on the rise and the demand for rental housing has been shrinking rental availability raising the rents and the competition for acceptable units. Rents have been increasing at about a rate of 2.5 percent a year while home prices have been dropping at about 3.1 percent a year. This makes buying a much better option. Lately, there has been an uptick in the home buying market and in some price ranges inventory is low for prospective buyers. Because prices and mortgage rates remain at all-time lows this is a perfect time to get out of a rental and into your own home. If you are looking for some hard numbers on your own personal financial picture the New York Times has an easy to use calculator that will help you determine how much you will save by buying a home. Click here to use the calculator.




Tags: Buy vs Rent  
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Posted by Judy Moore on 10/25/2015

Owning a home is a dream come true for most people. To them, it is living the ideal life, for others, it is the worst decision they will ever make as far as their finances are concerned. The reason for this is that there was no proper in-depth analysis before they made the purchase. Many questions come to mind when it comes to owning a home, questions like, do I really need a home? Will I stay in this home long enough to reap the benefits of owning it? Am I ready for the financial responsibilities associated with owning this home? Owning a home is a major financial investment and should not be done without a proper understanding of all aspects of ownership. Below is a †look at the pros and cons of owning a home, this should help prospective home owners determine if owning a home is in their favor. Pros and Cons of Owning a Home There is the need to consider the financial impact owning a home will have on you. Would being a home owner have a positive effect on your financial position? Let us look at the advantages and disadvantages from a balanced point of view before arriving at a conclusion. The Pros

  • As a home owner, you have greater privacy.
  • There is a great possibility that your home will increase in value.
  • You tend to have a stable cost as compared to renting because most mortgage rates are fixed.
  • Interest and property tax portion of your mortgage is tax deductible.
  • There is pride and a healthy self-esteem associated with owning a home.
The Cons
  • The financial commitment associated with owning a home is long term.
  • All maintenance related expenses associated with your home is your responsibility.
  • When you own a home, you are more likely tied to your community making it more difficult to suddenly relocate.
  • When buying a home, there is a down payment, mortgage payment and closing cost.
  • If you do not make the mortgage payment, your home can be taken by the bank.
  • There is no guarantee that the value of your home will increase.
Pros and Cons of Renting a Home The Pros Depending on your financial standing, renting a home might be a preferred option. Here are a few pros and cons associated with the renting.
  • It may be a cheaper option than buying a home with comparable size. Your rent might also cover the monthly utilities.
  • It affords more flexibility especially when you have a job that requires you to move from place to place.
  • Maintenance expenses are not on you. The landlord is responsible for all maintenance from plumbing to electricity as well as other expenses associated with household repairs.
The Cons
  • You are not entitled to a tax break. When you file for a tax return, you cannot claim deduction for property tax and mortgage.
  • Your rent is not fixed and there is the possibility that it would increase from year to year.
In summary, there are several factors to consider when deciding whether or not to buy a home as ownership is not for everyone. This important decision should be based on your present financial status, the nature of your job and what plans you have for the future.





Posted by Judy Moore on 11/23/2014

Home prices are at rock bottom and mortgage rates at all-time lows so you may be considering going from renter to homeowner. If you are planning on staying put for a while the choice makes sense. There are a few things to take into consideration before you make the leap from renter to owner. First, you will need to determine how much you can afford. Consult with a mortgage professional to help you determine what kind of mortgage you qualify for. Just because you pay $1,000 a month in rent, doesn't mean you can handle a $1,000 monthly mortgage payment. There are more costs to owning a home than just the mortgage payment. As a homeowner you will also be responsible for property tax, home insurance, utilities, and repairs. To prepare for those costs plan on adding about 40 percent to your base cost. So, if your mortgage is $1,000, add about $400 a month for a better estimate of costs. Before you make a rash decision see if you really can afford the cost difference. Once you know the cost difference spend a few months depositing the difference between your rent payment and your cost estimate in the bank. In the previous example you would deposit $400 a month into savings. If you've been able to keep up the deposits and pay your other bills, that's a sign you can afford to buy. Now that you have been saving more you have more money to put toward the down payment of your new home. These are just a few tips to get you started. Once you have a better financial picture it will be time to start shopping. That is when the fun begins.





Posted by Judy Moore on 2/23/2014

You may be considering buying a home but it is hard to know if you are ready to be a homeowner. It can be a big step. Buyers that educate themselves on the process and set realistic expectations have the best experiences. To gauge whether or not you are ready to own your first home you should ask yourself some serious questions.

  • Are you in a lease or is your living situation easily changed?
  • Do you need to remain in your current community or would you be willing to move?
  • Do you have the time and resources necessary to make your first home purchase a success?
If you have answered these questions favorably you may well be on your way to homeownership. The next step is to evaluate your financial situation. Here are some questions to check your financial readiness.
  • Do you have a steady source of income?
  • Do you know your credit history?
  • Do you have a down payment ?
  • Are you ready for the financial responsibilities that coincide with home ownership?
If your answers to these questions are positive then it is time to get the loan process started to see how much you can afford. A reputable lender will give you realistic expectations and many offer a free consultation for buyers seeking pre-approval. Now it is time to start your search. Working with an agent that you trust and are comfortable with is very important. My skills include educating you about the buying process, negotiating, having your best interest in mind and helping you find a perfect first home while hopefully saving you time and money.




Categories: Real estate