“Wow! How disingenuous! Could you think that because you create rent-to-sell transactions for living? Isn’t that like asking a barber if you need a haircut?”
At least that’s what I’d be asking as a reader. We live in a skeptical age, and that’s okay.
Let’s start with a story:
An average man meets a beautiful, energetic woman. He is taken. “If I could spend the rest of my life with her,” he thinks, “My life would be complete and I’d truly be happy! Just having her on my arm…” He knows he wants to marry her.
So why doesn’t he just ask her point-blank? That answer is easy. She’d think he was crazy! She doesn’t know anything about him; and the one thing she knows is that he isn’t that attractive! There are much better suitors out there! So what does he do?
He courts her. He asks her on a date. He asks her on many dates. He buys her flowers, takes her to expensive restaurants, listens to her stories, compliments her, and tries to show that he is an amazing man. She doesn’t fall in love with him at first, but day by day, she grows fonder and fonder of him.
Then, sometime later in the future, when she is vested and knows (almost) everything about him, she professes her love. And, at that point, he knows he is close to getting what he has wanted since her first laid his eyes on her. He picks the right moment and proposes. And she says, “…Yes!”
I’ll take a short pause so you can collect yourself, grab some tissues, and kiss your spouse.
This story is just like rent-to-sell (okay, huge transition here!). Home owners want to sell their homes more than anything. Buyers are scarce and selling in a short time period for full price is almost impossible. Cheap flings (focus on “cheap”) are the rage as neighbors’ houses are being sold for half price (short sales and foreclosures). Home owners are desperate and have to give their homes away and accept the consequences of future damaged credit.
Home owners just want to sell their homes, much like the man just wants to get married. But, with this economy, the reality of that happening quickly on good terms is almost crazy. So what to do?
Rent-to-sell (placing rent-to-own tenants into vacant homes for sale) is the courtship process. These tenant-buyers get to live in the house, work on improving their credit scores, make the home improvements they want, and work on building up a down payment so that they can buy (when the time is right).
And why is it the best time now to rent-to-sell? This is simply because the banks will have to lend more money out in the future! This stagnant housing market is killing their earnings. They will need to find a way to jumpstart this part of the business by lending to responsible parties (aka like tenants who pay their rent on time for 1-3 years, have improved credit scores, and a nice down payment?).
The time to put rent-to-own tenants into vacant homes for sale (rent-to-sell) is now. When the tenants are ready to buy, the future market should be looking a lot better for successful (loan and sale) consummation!