House is in ready-to-sell condition and I’ve been marketing the house for sale on a rent-to-own/lease-option basis, but so far buyers are not on the same page with me regarding the monthly rent and/or option fee. I originally wanted $10K for an option fee (just under 3%) and $2,200/month rent w/ a $500 rent credit (this rent is in line with what their PITI payment would be if they got a mortgage).
Problem is I keep getting calls from people with $2-3K available cash, who want to pay around $1500/month. I’m hesitant to go much below what I want, but frankly I’m becoming a motivated seller! The area where this house is located has been particularly hard-hit with the market slowdown over the last few months so that isn’t helping. I don’t have a payment due to seller until 2/1/08 so that gives me exactly 1 month to get this thing sold.
I’m considering re-negotiating my deal with the seller. She’ll probably take a “wrap” offer, on some type of land contract, agreement for deed, or whatever similar document is commonly used in the state of VA. Would I have a better shot getting this house sold using this strategy as opposed to a L/O? If so, what should I ask for as a down payment on a $339K townhouse?
By the way I probably wouldn’t be able to get the deed outright on this one. But I’m pretty sure the seller would accept an agreement for deed/land contract type of setup. Then I’d turn around and sell on the same type of setup. Well at least that’s the idea anyway.
By the way my option price with the seller is $310K, and my payment to the seller is $1493 (which covers only her PITI payment). I’m looking to sell for $339K.
This may be your problem. I’ve found that if I advertise a property “rent-to-own” I get someone calling with a renter’s mentality. These people are looking for a house at “market rent”. They’re also thinking that they will be putting down something like first month’s rent and a $1,000 sec. deposit. These are NOT the people that you want calling. You are looking for buyers not renters.
Try advertising, “No Qualifying, No Credit Check!” instead of “Rent-to-Own”. Also, advertise in the Homes for Sale sect. NOT the Rent-to-Own sect. of the paper. You should get people calling that are looking to buy.
And here’s another tip… even after your house is under contract with someone keep your ads going. This will help you build up a buyers list of people that you KNOW have a DP and can afford a mtg payment. It’s much easier to find a house for a buyer than a buyer for a house.
Interesting. Makes a lot of sense. Matter of fact I put out about 10 “no bank qualifying” signs today.
And here's another tip... even after your house is under contract with someone keep your ads going. This will help you build up a buyers list of people that you KNOW have a DP and can afford a mtg payment. It's much easier to find a house for a buyer than a buyer for a house.
Good Luck!
Good idea. Speaking of this, got another question - I ran a few ads, one in the major newspaper (Washington Post) and one in a multi-county local paper. Overall the results were pretty mediocre. I seem to get much better results from signs. What has been your experience, assuming you have tried several different marketing strategies?
I have DEFINITELY seen more activity generated by signs for both buyers and sellers. I love 'em! I only run ads in the major papers as a last ditch effort. I’ve found more success with signs, flyers and networking.
Speaking of flyers, try going to a high priced apartment complex and putting flyers on some windshields. The good thing about hitting those people is that you know that they’re already paying an arm and a leg for rent so maybe, just maybe, they might want to own something. It’s worth a shot if you’re getting desperate to unload this property.
I’m also trying out google adwords to find sellers. I’ve had my ads up for 1 month and have gotten a few hits. Got to keep playing with the keywords though. I’m really interested in seeing how many leads it brings in now that we’re past the holidays.
“Interesting. Makes a lot of sense. Matter of fact I put out about 10 “no bank qualifying” signs today.” - I hope they don’t get taken down. My signs always get taken down during the week. Might just be my area though.