Contingent sales - can't buy until they sell - Not always - update!!

Not long ago I posted this entry - Contingent sales - can't buy until they sell. I have gotten many phone calls on this and wanted to try to make this a bit more clear.

Q: Its a buyers market?

A: Yes

Q: My customer wants to buy something but cant get enough for the home they have (or don't want to self or a low price) what can I do?

A: Put the system that we have been using for over 10 years to work for your clients. Its a win win. We all know that the market will get better. We just don't know when. We know home prices will rise again. We just don't know when. We know its a great time to buy as prices are down.

The solution is simple in many cases. Your client can re-finance the home they have to get the money to put down on the new home they want -  advertise current home prior to re-finance to do a lease with option to purchase (in this market, those go pretty fast in my experience) with easy qualifying, low down and a monthly credit towards the purchase in two years.

With a lease to own, typically the buyer pays more then the fair market rent as additional money is going towards the down (or closing or what ever you agree that it will go towards). This part is the key.

You say your customer can not qualify for both loans. They don't want to be a landlord. They don't want to take the risk. The list goes on and on.

Answers to these questions are (in most cases) something that can be overcome with a simple explanation. With he added money towards the monthly rent (when you take into consideration the 75% rental credit), in many cases the customer does qualify if done properly.

With a lease to own, your buyer is not bothered with the normal "issues" that a renter may present. This person is buying your home, not renting. You determine the sales price now for two years from now. Your seller does not have to worry about selling for a low price today but rather a better price in two years.

Your customer gets additional "tax" benefits (I am not a CPA so any information re: tax benefits should come from your accountant) and when explained properly, is truly a win win.

Again, this does not work in all cases but in many.

If anyone has any questions, please feel free to let me know. This works. This will help sell more homes and by default, that will help the overall market.