Charlotte Property Management Weekly: Are You Practicing Insanity with your Home for Sale?

The definition of insanity is to do the same things over and over again and expect a different result. Is this what is happening with all the vacant homes still being listed for sale (that shouldn’t be)?




I’m not talking about occupied houses where the occupants would like to move, but don’t have to. I think they should have their houses on the market; they could get lucky. As the Lotto says, “You’ve got to be in it to win it!”



I’m talking about vacant homes that are sucking dollars out of the owners’ pockets month after depressing month. If you need general help in identifying these homes that shouldn’t be listed for sale, here are some obvious signs:



1. The house is listed $50K more than a comparable home in the neighborhood (regardless of condition)

2. The house has been on the market for a few months and has had few showings

3. The house has been on the market for a few months and has gotten no offers

4. It is not in tip-top shape

5. The home is in a neighborhood riddled with short sales and foreclosures

6. The neighbors that don’t have a “For Sale” sign in their yard feel left out



As we continue to see owners with expiring listing agreements inquire about rent-to-selling their home (opening their home to a rent-to-own tenant), I wonder why they were listed on the market in the first place. As my conspiracy-loving friend said, “It’s probably because if the real estate agent has the house listed for a regular sale, they’ll be first in line to list it as a short sale.” I seriously doubt this is how most real estate agents are conducting business, but some of the houses on the market make me wonder.



Most homeowners don’t want to default (and yes, a short sale is a default). And they don’t mind paying real estate agents if they are helping them achieve their goals of lifting the financial burden of the home off of them. The question is how. There are a lot of homes on the market for sale!



And there aren’t many qualified buyers out there. But… By logical deduction, that would mean that there are a lot of unqualified buyers out there; we can call them “non-qualifiers” (yuck!) or tenant-buyers (rent-to-own tenants). These rent-to-own tenants would love to occupy the vacant houses on the market and buy them at some point. Hmm… that sounds like a win-win for the owner and tenant-buyer.



But what about the agent? We need a win-win-win. That’s the part where we know that clients are willing to pay for value. An agent just needs to sell the created value and put a price on it. It shouldn’t be too hard; a client who stops losing thousands of dollars a month will happily pay a fee and thank you afterwards.



Wouldn’t you?



Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. He is also the author of A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!).

Charlotte Property Management Weekly: What’s the Difference Between “Rent-To-Own” and “Rent-To-Sell”?

Another popular question I hear from prospective clients is:




PC: “What’s the difference between rent-to-own and rent-to-sell?”



Us: “There is none!”



PC: “Well, if that’s the case, why don’t you eliminate the whole “rent-to-sell” terminology? I’ve heard of rent-to-own, but this rent-to-sell thing is new to me.”



Well, it’s a matter of perspective. A rental tenant who aspires to be a buyer would use rent-to-own as the correct terminology. Example:



“I want to rent-to-own this house. This means I’m going to rent the house, work on my credit until I can buy it, and then buy the darn thing before my lease is up!”



Most people get this part of it pretty easily.



Then there is rent-to-sell. This hasn’t been in the limelight until the past year or two, but has been picking up a considerable amount of steam in this poor economic environment. Now as more sellers have vacant homes sitting on the market and qualified buyers are nowhere to be found, they need a new solution to sell their homes.



So the sellers market their homes as rent-to-sell. They want renters to lease out their houses, make their monthly mortgage payments, and then buy them sometime during their lease period. If they don’t, that’s okay. They can then just rent-to-sell them again when the tenants move out.



To simplify, buyers rent-to-own (I want to rent and then buy the house) and sellers rent-to-sell (I am willing to rent my house out and let the tenant buy it). It’s that simple.



A more advanced example: A rent-to-own tenant would be looking for home sellers who would be willing to rent-to-sell their home to them. The rent-to-own tenant would lease the property, build their credit and down payment up during their lease period, and buy it from the home seller. Then the home would be considered “rent-to-sold.”



Yes, terminology can be confusing at times. But as more consumers and real estate agents are learning in this economy, knowledge of rent-to-own and rent-to-sell is imperative to housing liquidity.



Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. You can contact him directly at Brett@BDFRealty.com.