Real Estate Appraisal – Rental Properties

Real Estate Appraisal – Rental Properties

Real estate appraisal for rental properties isn’t the same as for single family homes. If you were looking at a 24-unit building, it would be difficult to find similar ones nearby that have recently sold. Therefore, a market analysis using comparable sales isn’t normally used.

It is also not ideal to use replacement costs either. How do you figure replacement cost if there is no land for sale nearby with proper zoning? This is used as a secondary method, though, and can tell you if maybe you should be building instead of buying.

Real Estate Appraisal Using Capitalization

Investors buy rental properties for the income. Therefore it is the income that is used to determine value. The rate of return expected by investors in a given area gives you the capitalization rate, and this is what you use to accurately appraise an income property.

Start with the gross income. Subtract all expenses, but not including loan payments. If a building’s gross income is %82,000 per year, and the expenses %30,000, you have a net before debt-service of %52,000. Now apply the capitalization rate to this figure.

If the common capitalization rate is .10, for example (ask a real estate agent), divide the income of %52,000 by .10, and you get %520,000. This is the value of the building. If the usual rate is .08, meaning investors in the area expect an 8%PRCTG% return, the value would be %650,000.

Easy Real Estate Appraisal?

Net income before debt-service, divided by the “cap rate:” It really is a simple formula. The tough part getting accurate income figures. Is the seller showing you ALL the normal expenses, and not exagerating income? If he stopped repairs for a year, and is showing “projected” rents, the income figure could be %15,000 too high. This would mean the building is worth %187,000 less (.08 cap rate) than your appraisal shows.

Another thing smart investors do when buying, is to separate out income from vending machines and laundry machines. If these provide %6,000 of the income, that would add %75,000 to the appraised value (.08 cap rate). Do the appraisal without this income included, then add back the replacement cost of the machines (probably much less than %75,000).

Be careful when using any real estate appraisal method. No formula is perfect, and all are only as good as the figures you plug into them. Used wisely, though, real estate appraisal using capitalization rates is one of the most accurate methods.

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Choosing a Property Manager for a Vacation Rental Home

Choosing a Property Manager for a Vacation Rental Home

So you are the proud owner of a vacation home ? congratulations. But just as with your own home, a vacation home needs a lot of tender loving care. Who is going to look after it when you are away? And, perhaps, how is it going to pay its own way? Thoughts like these tend to push vacation home owners into thinking about appointing a property management company. So what should you be looking for in a property manager, and how do you go about finding one with the qualities you want?

First and foremost, you have to decide if you just want the property taken care of, or if you also want it rented out. This will determine what kind of property management firm you want, and whether you need to check their credentials for marketing your firm, or just for looking after it. Assuming that you would like your home to generate some income for you, you need to look for several key capabilities

? A firm which will ensure the highest standards of care and attention to the fabric and contents of your property. Lots of rental income will not make up for the damage caused by careless renters. Make sure that your chosen firm will keep on top of every
? Personal check-in and check-out of every rental. Many firms take advantage of the availability of keyless coded locks to allow renters to check themselves in and out. This means that they never know who is in your property, and whether your four-bedroom home which is supposed to have a maximum of 8 guests actually has 16 grad party celebrants all over the floors
? The highest standards of cleaning. Cleaning a property thoroughly is time-consuming and expensive. Many property management firms cut corners here, and if they do, you will eventually pay the price in worn-out carpets and other forms of dilapidation.
? Superior marketing capabilities. Marketing vacation rental properties has become a sophisticated business these days. Make sure that the primary website on which your property will appear is ranked highly against the most popular keywords for your location. A local firm without much experience in search engine optimization may be able to take good care of your property but they won?t generate a lot of income since no-one will know that they exist.
? Great service for guests. Look for a manager who knows how to offer excellent service to guests: arrival baskets of food and drink, pre-booking of activities, restaurant reservations etc. If guests feel they are well looked-after, they will be more inclined to come again, but also feel more of an obligation to take good care of the property they are in.
? Great service to you. You should expect VIP treatment when you are using your own property, but also VIP service when you call up your property manager to enquire about availability, discuss renovation and maintenance issues, query your income statements or any other matter. Make sure you will always get to speak to someone senior who knows you and your property.

Have a look at this page: Whistler property management for a company which looks as if they know what they are doing. But make sure you talk to them in detail and go over the management contract with a fine tooth comb before you sign on the dotted line. You should expect to pay 35-50%PRCTG% of gross rental income to the management company; if they charge less you might want to be suspicious of what they are offering; if more, they?re probably too expensive. This may sound a lot, but remember that they are looking after your property for no fixed outlay to you, and they only make money when you do as well.

Good luck with your search.

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Buy Or Rent?

Buy Or Rent?

Should you buy or rent? It depends on your circumstances, and the real estate market where you are going to live. Years ago, I sold a home for a young couple who owed almost as much as the sales price on their house. They needed to take money from savings to pay the closing costs and sales commission. You can bet that they wished they had rented for the couple years they lived there.

This brings up the first thing to consider when comparing buying versus renting: the amount of time you’ll be there. Buying and later selling a home will usually cost about 10%PRCTG% or more of the value of the home. These costs mean that if the home only went up in value 10%PRCTG% or so in the year or two you lived there, you won’t be gaining anything (equity gain from principal pay-down is very little in the first years). You’ll often be better off renting if you’ll be in a town for less than a few years.

What about towns with faster rates of appreciation? Have you done some serious homework? If not, to assume appreciation will be more than the rate of inflation is just gambling. The sellers in the example above sold for the same price they bought the house for two years earlier – and this was in a decent and growing area. You can’t count on fast appreciation just because it has been that way recently.

To Buy Or Rent – Cost Comparison

Looking at buying versus renting, you have to take into account that in many places it cost much more to buy. In Tucson, Arizona, for example, a small home can cost %200,000. The mortgage payment, taxes, insurance and maintenance will add up to about %1,600 per month, but you can rent the same size home for about %800.

What does that mean? Many real estate fanatics will say you’re at least buying something for your money, and renting is throwing your money away. Of course in this example more than %1,000 of your payment will be going towards interest alone, and that’s not buying you anything.

Suppose you can afford the %1600 per month, but instead you rent for %800 and put the other %800 into a decent safe investment that makes you 5%PRCTG%? In three years you’ll have over %30,000 in this account. If the home appreciated at 6%PRCTG% per year (it has been more like 25%PRCTG% per year recently, but that can’t continue, and assuming so is not planning, but gambling), it would be worth %231,000. The costs of initially buying it and then selling it would be around %13,800 (2%PRCTG% buying and 6%PRCTG% selling), leaving you with a gain of about 19,000 once we include your principal pay-down.

In other words, you would be at least %11,000 better off if you rented and banked the difference. Every market is different, of course, so you have to do the math. Compare the total costs of owning versus renting, and then make safe assumptions about the rate of appreciation for homes.

If you’ll definitely be in one place for a long time to come, it will almost always be better to buy than to rent. In the last example, buying becomes a better bet after about four or five years. Also consider that if you get a fixed rate mortgage, your payment will never change, a benefit landlords won’t offer you that on your rent payment.

To sum up, look at the time you’ll be there, the comparison of total monthly costs, whether rents are going up fast, and whether you have good reason to believe home prices will be going up fast. Then look also at all the personal factors. Do you want to be responsible for the maintenance, yard work and unpredictability of ownership problems?

To buy or to rent? In the end, you have to work this one out by yourself.

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Less people are renting homes in Europe

Less people are renting homes in Europe

Over the last 20 years there have been significant changes in the choices people are making in whether they wish to rent or own their house, flat or apartment. In the early 1980′s West European countries averaged between 50%PRCTG% and 60%PRCTG% of homes owner occupied as opposed to rented. However as years progress into the early 2000s there have been some very significant changes with most countries seeing a significant reduction in the number of properties rented. Some of the most significant changes in the percentage of properties rented in Western Europe are:

From 1980/81 to 2001/02

UK from 42%PRCTG% to 30%PRCTG%; Luxembourg from 39%PRCTG% to 26%PRCTG%; Netherlands from 58%PRCTG% to 46%PRCTG%; Spain from 21%PRCTG% to 11%PRCTG%.

One possibility for this trend is the increasing standards of living combined with market changes improving the choice and availability of financial products to purchase properties. However also to be considered is the very significant differences when comparisons are made across countries. Below is a summary of the most recent data found on the percentage of homes rented for each country.

Austria 40%PRCTG%; Belgium 31%PRCTG%; Denmark 51%PRCTG%; Finland 32%PRCTG%; France 40%PRCTG%; Germany (ex FRG) 55%PRCTG%; Germany (ex DDR) 66%PRCTG%; Greece 20%PRCTG%; Ireland 16%PRCTG%; Italy 25%PRCTG%; Luxembourg 26%PRCTG%; Netherlands 46%PRCTG%; Portugal 21%PRCTG%; Spain 11%PRCTG% Sweden 39%PRCTG%; United Kingdom 30%PRCTG%.

One possible conjecture is that countries with a higher percentage of properties in the rental sector may have higher workforce mobility. This would suggest that Germany may have significantly higher workforce mobility than other West European countries. In contrast Spain may have relatively low workforce mobility.

The data available on property to rent across Western Europe raises many more questions than it answers however one factor that is very evident is the definite trend for a shift from rental to owner occupied homes.

For landlords and real estate letting agents who have properties to rent this may also suggest that competition will increase to find tenants. However there are other factors to consider such as the type of rental property. For example the UK rental sector can be split into three main categories, these are Council (e.g. Government owned), Housing Associations (often charitable trusts) and Private (e.g. private landlords and investors). In 2003 the Private sector accounted for 35%PRCTG% of rental properties in the UK, and this percentage was increasing as more people invest in private rental property.

Overall it is difficult to draw precise conclusions however taking the UK example there are some specific factors, firstly overall rental stock has reduced significantly from the 1980s into the early 2000s, secondly there has been an increase in private rental properties, particularly within the last 10 years. The increase in private rental has resulted in more companies such as www.simple2rent.co.uk who provide free services to landlords and tenants for homes to rent in London and throughout the UK.

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Find Your Next Piece of Land In A Desert Oasis

Imagine a beautiful desert oasis, where you’re completely surrounded by sand, palm trees and cacti. If this sounds like your dream home then why not look into obtaining Arizona ranch land for sale? There are a lot of people that are completely oblivious to all of the features that Arizona has to offer.

Not only can you obtain Prescott Arizona land for sale at an extremely reasonable rate, the land is unlike anything that you have ever feasted your eyes upon. In fact, statistics have shown that there are more people that are opting to move from their present place of residence to Arizona in order to take advantage of the 300 days of sunlight and the rich land that is available for the taking.

Northern Arizona land for sale will actually put you right in the middle of all four seasons. Contrary to belief, northern Arizona does receive snow and it does experience all four seasons. Inadvertently, the amount of snow that you can expect to receive in northern Arizona will still be progressively less than the amount of snow that you can expect to obtain in Northern states.

Arizona is quickly becoming one of the most sought after places to reside. The dry climate is exceptional for adverse medical conditions such as excessive allergies, as well as arthritis. The land itself is vast and wide full of mountain ranges, cacti and palm trees throughout the entire state. When you purchase land in Arizona, you will definitely not regret your decision to do so.

Buy to Let Rental Property

Buy to Let Rental Property

Condotel Investments in the Philippines, Buy to Let rental properties are now being preferred to failing Pension Plans as more and more Filipinos and Overseas Property Investors look to the future and retirement.

20 Dollars a day for 6 years will buy you a Studio Condotel unit in the Philippines with a projected ROI through rentals of some 500 dollars per month after 3 years. With preconstruction property appreciating at some 20-30%PRCTG% per annum not only does the Real Estate Appreciation look good but the rental income is in excess of what many Pension Plans offer for the same or similar investment.

With many Overseas Filipinos and Offshore Property Investors looking to start saving for retirement, the Philippines with its comparative low cost of real estate yet high rates of Hotel Accommodations, make the Condotel investment an extremely attractive investment proposition.

Beth Collingz, International Marketing Director for PLC Global, a company specializing in Condo Hotel Sales and Investments in the Philippines for the Lancaster Brand of Condotels, said that many new investors are looking to replace failed pension plans and other future saving schemes with a solid investment in Real Estate.

?Many of my clients are looking for investments that will give them an income for retirement as an alternative to traditional private pension plans that have failed. Personally, I have always regarded Pension Plans as a glorified ?Pyramid Scheme?. Most company pension plans are insufficient as are Government Pensions. Bank rates for Savings accounts are at record lows. Savvy investors are now looking for a more solid investment with potential for monthly income. Condotels in the Philippines fit the bill?

This potential, high rates of rental returns from Condotel Investments, currently from 8%PRCTG% up to 16%PRCTG% per annum, opens up a huge market not traditionally looked at by Real Estate Agents and Brokers whom all so often run around like headless chickens looking for normal residential profile ?buyers? without looking at the by far bigger picture of investments, investing and retirement.

?We look at Condotels as pure investments. Not primarily as Real Estate. If you look at the Condo Hotel market as investing for future income, and think outside of the box, it is plain to see that Condotels are not only real estate investments but more importantly income generating property. Think of Condotels as a Managed Pension Plan. After all, Condotel units are fully managed property. The owner of the property does not have the hassle of renting out the unit and contend with all the normal pit falls of being an amateur land lord. This is taken care of by the Condo Hotel Management? said Collingz.

?One of my clients from Chicago, just purchased 4 Studio Condotel Suites at Lancaster ? The Atrium Manila which is currently in preconstruction sales. His plan is to retire in the Philippines in 2012, live in one of the Suites and receive the Condotel rental income on the other three. His outlay for the purchase is only around 85 Dollars a day for 6 years by opting to purchase on a 6 year no prequalification, no down payment, no interest payment plan. Even before completing payment for the units, he will be receiving some %1,500 a month in rental income in additional to any Government or Private Company Pension Plan. Better yet, the rental income is in tune with inflation and buying on preconstruction terms gives real estate appreciation of some 60-80%PRCTG% over 3 years. As Hotel Rates increase yearly, so does the rental income?

Foreign Nationals are legally allowed to purchase as much as 40%PRCTG% of the total number of condominium units on the market at any given time. Overseas Filipinos and more and more foreigners are now emerging as a market for condotel units. Many or our clients are coming from different countries like South Korea, Australia, United Kingdom, Saudi Arabia and other parts of the Middle East,? Collingz said.

Lancaster – The Atrium Tower II [which is the second Tower adjacent to the existing ?Sold Out? Tower I] is now accepting Reservations for Studio, One, Two & Three Bedroom Suites adopting International Standard Escrow Trust Account ?Buyer Safe? Easy Secure Payment Plans? with 6 year interest free payment terms or up to 12 year ?In-House? financing available, full condo ownership, no management costs for Condotel Suites and minimum monthly maintenance fees ? ?You really should take a moment to look at this Philippine Condotel Investment Opportunity? enthused Collingz.

All units at the Lancaster Suites have kitchen facilities. The standard unit price provides for the suite to be finished but not fully furnished. Included in the current price are the interior finishing?s such as tiled & fitted bathrooms, bedrooms with simulated wood plank flooring, living and dining area tiled floorings and lower kitchen cabinets/work tops installed. A complete optional extra interior fit-out package including appliances will be available towards the time the units are closer to being completed towards the latter part of 2009. Monthly condo dues are currently around 80 pesos/square meter of the unit floor area/month..

The Lancaster Atrium Suites are now available on the very affordable and competitive New Payment Plan that provides for Suites to be purchased on a No Interest No Down Payment basis with 67%PRCTG% of the payment payable over 60 equal consecutive monthly installments without interest and the 33%PRCTG% balance payable upon turnover of the unit or to be paid over an additional 5 years from turnover through our hassle free no prequalification ?In-House? Finance Plans?

The current selling price [effective March 1, 2007] for the Lancaster Manila Atrium Tower A Tax Exempt Studio Units is Pesos 75,888 or %1,615.00 per sqm. The One Bedroom, Two and Three Bedroom Suites are priced at Pesos 84,994.56 or %1,808.80 per sqm including Government Taxes [R-Vat 12%PRCTG%]. Units may be purchased on a Six Year No Interest Charge Term of payment or longer term ?In-House? financing plans. Turnover of units for Tower A will be from December 2009/2010

All payments will be made to the Lancaster Suites Manila Atrium Tower A Equitable PCI Bank Escrow Trust Account. It is anticipated, given the track record on sales of Tower I Units that property appreciation for initial buyers of Tower A Atrium Units will be at least 60-70%PRCTG% on turnover of units.

Beth Collingz

PLC International Marketing Networks

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Renting ? Making Other People Rich

Renting ? Making Other People Rich

Many renters say they prefer to rent because it is simple and doesn?t carry the stress of home ownership. In truth, they are simply making other people rich.

Equity

What if I told you that if you purchased a home, you wouldn?t have to make any monthly payments on it? On top of this, I?d promise you that when the house was sold, you would get to keep all of the equity gain in the home. Sound like a pipe dream? This is exactly what renters are doing for their landlords.

Regardless of how you break down a renting versus homeownership argument, there is one universal fact. If you rent, you are building equity for your landlord. Let?s take a look at a simple example.

Assume you rent a unit in a duplex and pay %1,000 a month for it. Assume further that you live in the unit for three years. During this period, you will have paid your landlord a total of %36,000. You can further assume that your landlord?s mortgage payment was less than %36,000 or he would raise your month payment. The end all effect of this situation is you have paid his mortgage for three years. Think about that for a minute.

Over the three years, you have made every single mortgage payment for your landlord. In doing so, you have helped him build equity in the home through the part of the mortgage payments applied to the principal of the loan. On top of that, the equity growth in the property is entirely his. If you?ve paid off %10,000 in principal and the home has appreciated by 100,000, you?ve just put %110,000 into his pocket. Yep, you?ve been making other people rich.

If you?re renting, you will undoubtedly find the above scenario very depressing. Unfortunately, it gets worse. Go ahead and make a list of your assets and debts. List every single thing you can think of and then subtract the total debts from the total assets. Whatever the number is, would it look better if you had added %110,000 to your balance sheet instead of your landlords?

Renting is a necessity, not an option. You should only rent if you cannot get into a home for some reason. With millions of loan options out there, home ownership should be at the top of your priority list.

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Apartment for Rent ? When Is It Better to Rent Instead of Buy?

Apartment for Rent ? When Is It Better to Rent Instead of Buy?

It was 5:00 PM and time for Susan to call it quits for the day. While signing off the computer, a last-minute check of the traffic reports revealed that the roads were backed up again. Susan drove home against the commute feeling her daily rush of sympathy for all those on the other side of the road stopped in traffic.

Ten minutes later, she drove past a golf course and pulled into home. The flowers were especially lovely this month and the fountain sparkled as it reflected the brilliant colors of the foliage. She drove past the landscaped grounds, pool and through the security gates that swung open with her security access.

What would it be tonight, a cardio work-out? No, she?d invited Steve over for some tennis. After a pleasant game, they?d head back to her place, fix dinner in her gourmet kitchen and eat on the balcony at tree level while the evening breeze rustled the nearby leaves. To wind down, they?d take a dip in one of the pools and relax in the Jacuzzi in the evening air. Maybe tomorrow night they could hit a few balls at the nearby course or check out one of the nearby art galleries.

She placed her mail on the granite countertop and padded across the ceramic tile to the sink at the breakfast bar to take her daily vitamins. A quick check with her concierge service confirmed the tickets for the weekend show, and she filed the maintenance report for the fix to her marble bathroom sink ? the repairs had been quietly made while she was away. She took a deep breath, turned on the surround sound and walked over to the private balcony off the main bedroom.

How does Susan afford this life? She doesn?t have a trust fund, and her income is about the same as colleagues that commute long distances to go home to maintenance, chores, yard work and television. Susan goes home to a beautiful home with a gourmet kitchen, elegant baths, vaulted ceilings, sun rooms, surround sound, sound reduction features, plush carpeting, ceramic tile, and custom oak cabinets. She goes home to tennis, golf, swimming, fountains and lovely grounds because she lives in conveniently located, luxury apartments. She enjoys an easy commute, concierge services, laundry services, professional landscaping, exercise facilities, recreational services, community parties, easy care, and maintenance services ? all for less than her friends are paying in mortgage costs.

When does it make sense to live in apartments?

According to Evelyn Barfield of GreystoneProperties.net there are many situations when renting is a much better financial choice than purchasing a home. Home ownership often means commuting long distances, constant maintenance and upkeep, mortgage payments, and yard maintenance. The term ?bedroom community? is a term for people who own homes long distances from their daily lives. The owners don?t actually live in their home, they simply return to it late at night to sleep. The home remains empty most of the time.

Renting luxury apartments offers an alternative to long commutes, constant maintenance and a fixed residence. It is a great choice for those who want flexibility, mobility, easy care and a freer life. Luxury apartments offer all the amenities that one would wish in a home with none of the maintenance or hassle. The vaulted ceilings, clubhouses, movie theatres, pools, tennis courts, Jacuzzi, cardio fitness equipment, fountains, gardens and landscaping are maintenance free and always available for use. Luxury apartments can often be found in great locations with easy access to work, golf or downtown. The cost of purchasing in such areas is often prohibitive, but luxury apartment living enables one to enjoy the location, amenities and lifestyle at a fraction of the cost.

For those in fluid situations, renting is usually a much better financial choice. Purchasing a home becomes financially wise only if housing prices in that particular neighborhood rise, if the homebuyer stays in the home long enough to justify the up-front costs, and if the maintenance or repairs to a home are kept to a minimum. Purchasing a home almost never makes financial sense for those who stay in a location less than 2 years. Unexpected expenses, taxes, repair costs or upgrades crop up often and can wreak havoc with a budget. Luxury apartments offer a fixed cost per month, which includes professional management, upkeep and maintenance. Renting a luxury apartment can enable people to enjoy a freer, more relaxed, fun-filled life.

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Real Estate Rentals – Selling For More

Real Estate Rentals – Selling For More

Selling real estate rentals isn’t like selling houses. You can paint a house, and get a little more because it looks nice. Rental properties, especially larger ones, are different, because they’re bought by investors, who look at income more than new paint. Raise the income, and you increase value to investors.

Time to learn about capitalization rates. If investors in your area expect a capitalization rate of .08 it means they want a net return (before loan payments and taxes) of 8%PRCTG% on the purchase price. So if your three-plex generates %12,000 net income annually, they’ll value it around %150,000 (%12,000 divided by .08). If you can make it generate %16,000, you make it worth %200,000.

More Income From Real Estate Rentals

Raising rents is the obvious way to boost income, if you can justify it. See what similar units are renting for. If your units are %60 below the going rate, you can raise the rents and not lose your renters. Increasing the rent %60 for three apartments means %2160 more net income annually. With a .08 cap rate, you just added %27,000 to the value of your property.

There are other ways to raise rents. Maybe your tenants will agree to %30 more per month if you have a carport built. That’s %1080 more net income annually, meaning roughly %13,500 more value added to your property. (%30 x 3 units x 12 months = %1080 divided by a .08 cap rate = %13,500) If you can build that carport for %4,000, that’s a good return on investment right? What else do they want?

Higher rent isn’t the only way to get more income. Storage sheds can be rented to tenants or you could put in a coin-operated washer and dryer. With a larger income property, you could install pop machines.

Reduce Expenses Of Real Estate Rentals

Could you add insulation to reduce the heating costs? If you’re paying %80/month for lawn care, will one of the tenants do it for %40? Could you buy cheaper insurance? Any way you can reduce expenses raises net income (unless it scares away tenants). A new %4,000 furnace that saves %800/year on heating costs means you just turned %4,000 into a %10,000 higher sales price.

This isn’t an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your rental properties. Make the changes at least several months before you try to sell the property (a year before, if possible). Also, learn how do the math – it really does matter with real estate rentals.

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?Renting Back? After Your Home Is Sold

?Renting Back? After Your Home Is Sold

Sometimes it?s helpful to sell your home before you really want to move. This often happens when you are having a new home built, but aren?t sure of the completion date. Is there any way you can sell your home so you?re sure of the funds available for the new purchase, but continue to live in your old home until construction of the new one is complete. Yes, there is with the renting back strategy.

Enter the Lease-Back or Rent-Back Agreement

The particulars of this strategy vary from state to state, but in the strong seller?s market we?re experiencing, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.

The agreement covering the situation states the length of time the seller will remain. It can be done with a specific date named or wording that allows the seller to remain up to a specific date with the possibility of her moving sooner. The amount can be a fixed figure paid out of the proceeds of settlement or a monthly amount, or a daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer?s new loan. Sometimes there is a deposit against damage, sometimes not. There is usually a clause saying the seller will hold the buyer harmless for any damage to himself or his property which occurs after the sale is consummated and before the seller moves.

The attorney who draws up your contract offer can create such an agreement. If you?re using online forms, you should be able to find one for this situation. If you?re working with a real estate broker, he or she can handle it for you.

An Example

I?ve recently seen a very pleasant example of this idea in action. An elderly widow contracted to have a one level condo unit built in a new community which provides all exterior maintenance. She had had hip replacement surgery and wanted to get away from the drawbacks of the home in which she?d reared her children. The home was large, had stairs and was located on a large, partially wooded lot with many mature perennials and shrubs. Both the home and garden were beautiful, but high maintenance.

Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. A young couple with two sons was very anxious to buy it. The situation was competitive. They made the widow an offer. She countered their original offer. She did not raise their offer price, which was slightly below her asking price. She did not believe the young couple would qualify for a larger loan. Instead, she did something rather creative.

The widow countered with a proposal that she ?rent back? for a period of ?up to? a certain date (a date beyond her scheduled competition date on the condo) in exchange for a modest flat sum to be paid to the buyer at settlement. The total rent back period was less than two months. The flat fee was less than the amount of the new mortgage payment for the buyers. However, since they made no payment on their new mortgage the first month, it wasn?t too far out of line. The couple really wanted the home, so they accepted the counter offer.

Another win, win situation was created. The widow only had to move one time and the young couple got a house they probably wouldn?t have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, perhaps you can work out a similar solution.

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