Lease-Option May Be Good Option

Posted on 20. Dec, 2011 by irescan in FAQs, News, Services

Many people who are struggling to get mortgages are finding comfort in a growing trend: lease-options.

This is a contract that allows renters to lease the property and, at the end of their lease, they have the option to buy the home.
Hopeful buyers with poor credit are finding the rent-to-own option creates an opportunity to repair their credit while positioning them for home ownership. It’s a win-win situation. Sellers find that properties that once sat vacant now offer cash flow.
The concept, while not new, is gaining momentum. There are a number of reasons buyers are finding this option appealing and it’s not just because of bad credit. Some buyers are not sure if they’re ready to own a home and take on all the responsibilities and extra costs that go with home ownership; the lease-purchase contract gives the buyers a chance to give home ownership a test drive.
Individual sellers in the housing resale market are considering this method to help get their homes sold and so, too, are developers who have found they’re loaded up on properties they can’t sell.
Understanding the lease-option is very important. There are various differences in the way this type of contract can be drafted, so it is critical to hire experts to help negotiate the process to make sure you understand the terms and are protected. Here is some basic information about leasing with the option to buy a property.
Typically, in return for the lessor/seller extending the offer to buy the property after a period of time (usually one to three years) at a predetermined price, the tenant/buyer has to pay an upfront option (fee). That fee is generally non-refundable. A portion of the monthly rent may be applied toward the down payment to purchase the home.

Advantages for the buyer/lessee:
• Under this type of lease-option contract, for the period stated, you are the only one who has the option to buy the property.
• Typically a portion of your rent goes toward building equity and, when you purchase the home, is applied toward the down payment.
• You have a contract to buy the home when the lease is up.
• Usually you can buy the home at any time during the contract.
• You can see if home ownership is right for you by testing it out.
• In an appreciating market, you may get a good deal if the home goes up in value and you have already locked in a specific sale price for the home that is less than how much it appreciates. However, the reverse is true too. You could end up paying more for the home later on if it depreciates and a set price was locked in for a higher amount than what the home is worth when your lease-option is up.
• You have a chance to clean up your credit and build equity.

Advantages for the seller/lessor:
• Immediate cash flow from the tenant and the opportunity to sell your property later on.
• If the lessee/buyer doesn’t buy your property, you keep the upfront fee (option money).
• You may have a larger pool to market your home to because you are marketing to traditional buyers and also renters and investors.
• You will likely get higher-quality tenants who take better care of the home since the tenants may want to buy it in the future.
• Since you own the home, you retain tax-shelter benefits while you have tenants in the home.
• You may get some peace of mind knowing that you have tenants in your home who are working toward buying the home.

Things to consider when utilizing a lease-option:
• Do a home inspection and document necessary repairs. Take photos to document the condition of the home.
• Make sure all payments are kept up such as mortgage, taxes, and insurance for the property.
• Verify if there are any liens against the property.
• Spell out the terms if the lessee/buyer does not exercise the option to buy the home at the end of the lease.
• Specify everything in writing; option contracts must have all the specific information that a sales contract would have in order to be enforceable.
• Prepare a draft of an undated and unsigned purchase agreement.
It’s always a good idea, when purchasing real estate, to contact experts to assist you through the process to ensure that you understand the contract and ultimately complete a successful transaction.

Fractional Property Ownership

Posted on 14. Sep, 2011 by irescan in FAQs, Glossary, Services

Fractional ownership simply means the division of any asset into portions or shares. If the “asset” is a property, the title or deed can be legally divided into shares. In certain instances this is done by creating a “mezzanine structure”, i.e. creating a company which owns the property then allowing multiple owners or investors to own shares in the company. Those shares can then be purchased and owned by more than one individual. The reasons for a “mezzanine structure” can vary. Two common reasons are to allow transfer of shares without the need to reflect changes on the title or deed to the property, and for tax benefits.

Shared ownership of the property and its deed will also entitle shareholders to certain usage rights, usually in the form of weeks. Conceptually, fractional ownership is not the same as timeshare. Fractional ownership affords much of the freedom and usage benefits offered in timeshare, however, the fundamental difference with fractional ownership is that the purchaser owns part of the title (as opposed to units of “time”). Therefore, if the property appreciates in value, then so do the shares. As with whole ownership, fractional owners can sell whenever they deem necessary or prudent, releasing the capital growth from their “bricks & mortar” investment.

Penbrook Meadows Bungalow Has Been Rented To A Very Nice Family

Posted on 26. Aug, 2011 by irescan in News

Buying a Lease-to-Own Home

Posted on 01. Apr, 2011 by irescan in FAQs, Glossary

What you need to know before you decide to enter a lease-to-own agreement.
If you’re a cash-challenged home buyer, a lease-to-own agreement may be a way to buy a home and accumulate a down payment. A lease-option also gives you a chance to check out the neighborhood and occupy the home before you decide whether you want to buy it.

What is a lease-to-own or lease-option agreement?
A lease-option agreement is both a lease that allows you to occupy the home and an option that allows you to purchase the home in the future at an agreed-upon price.

A typical lease-option agreement requires you to pay a somewhat higher monthly rent for the home and obligates the owner to credit a portion of that rent toward your down payment. For example, if the owner’s expected market rent were $1,500 per month, he or she might increase that to $1,800 per month and apply $300 per month to your down payment. After one year, you would have a down payment credit of $3,600.

A formal contract is a must.
A lease-option agreement should be formalized in a written contract that specifies the monthly rent, the amount of rent that will be credited to the down payment, the sales price and the expiration date of the option. Any contingencies (e.g., your right to obtain a home inspection) or other important terms of the agreement should be stated in the contract as well.

A lease-option allows the owner to sell the home to you without paying a commission to a real estate broker. But keep in mind that the transaction is thus bereft of a broker’s advice, expertise and assistance. Payment of other closing costs such as title insurance and transfer fees is subject to negotiation and should be addressed in either the lease-option contract or a later addendum to that contract.

Lease-option isn’t an obligation to buy.
A lease-option doesn’t obligate you to purchase the home; rather, it is simply an opportunity to do so with the advantages of a known purchase price and a rent credit toward the down payment. If you elect not to exercise the option to purchase the home, your credited rent usually is forfeited to the owner. This money is a form of compensation to the owner for the option, which compromises his or her freedom to sell the property to someone else during that time. Reasons why you might decide not to exercise an option include lower property values in the area, an inability to obtain a mortgage, a job transfer or disenchantment with the neighborhood or the home, among others.

Who pays taxes, insurance, repairs?
The owner is responsible for property taxes, insurance, and maintenance of the property during the lease-option term since you have no ownership interest in the property. Likewise, the owner, not you, would suffer a loss if the property were damaged or destroyed by a natural disaster that occurred during your lease-option term. Repairs are typically negotiated up front, typically the owner will requir the buyer take responsibility for the first $500.00 of all repair costs. Remember a Lease-to-Own is not a Landlord\Renter relationship, so changing burned out light bulbs and leaky fixtures are the responsibility of the Buyer. Nonetheless, you may want to purchase separate insurance to cover your own personal belongings. Of course, once you purchase the property at the end of the lease-option term, you’ll be responsible for the taxes, insurance, and repairs related to the home.

Because lease-to-own agreements can be complex legal arrangements, we recommend you contact an attorney to make sure your interests are protected.

Expand your Possibilities with a Home Lease Option

Posted on 01. Apr, 2011 by irescan in FAQs

What is a lease option?

A lease option is a combination real estate rental, sales and finance technique. It is a property lease, similar to automotive leasing practices, with a fixed time period giving tenant’s an option to buy the property at an agreed price during the lease term. In many if not most of lease-option situations a portion of the rent is applied towards a future down payment. This is one of the primary attractions of a lease option purchase where a family struggling to have enough funds for a down payment or closing costs can still get into a home and begin benefiting from this essential asset.

How does a lease option work?

- During the lease agreement, a purchase price that satisfies both the buyer and seller is determined.

- The buyer and seller agree on a time limit for when the buyer must commit to buying the home. This stage provides a lot of flexibility for a buyer trying to save money for the down payment. If they choose an extended amount of time they can make payments towards the mortgage on a monthly basis, chipping away at the ominous down payment cost.

- The seller determines the rent market-value of the home as if the buyer were simply planning on renting the unit. From there, the buyer and seller can determine an amount to add on to the rent price on a monthly basis (anywhere from $20-$200 or more) which can go towards the down payment. This money is non-refundable if the buyer later decides against purchasing the home. For this reason, buyers should be prudent in their monthly commitment if they are not fully committed to going through with the buy option at the end of the lease. The great benefit of putting money towards the down payment on a monthly basis is it acts as a forced savings account, with money being directly paid to the seller.

- Agree upon terms regarding the exercise of the option, such as the escrow period and financing.

- Determine who will pay for inspections, work and warranties when the time comes to complete the purchase.

- Handle the transaction as a lease until you are ready to exercise the option.

Benefits of a lease option for the buyer:

The single greatest benefit for the buyer is that a small amount of cash is due up-front, making the purchasing of a home a viable option for those who might otherwise not have this possibility financially. By slowly paying off the down payment while renting the lessee avoids going into significant debt to obtain the cash for closing on a home. Typically, the credit towards the down payment can be anywhere from 10-100% of the monthly rent depending on the seller.

In addition to the financial advantages of a lease option, a buyer also benefits by living in the home they might want to purchase. This puts them in a prime position to determine whether or not the home will be compatible with their wants and needs. After experiencing neighbors, schools, and the functionality of the home for several years, a buyer is much more educated on the value of their potential purchase, improving the buyer’s ability to make a wise decision on the home.

Benefits of a lease option for the seller:

No matter how slow the local real estate market might be, there is almost always a strong demand from lease option buyers. This is because many prospective home buyers can usually afford the monthly payments but they often have insufficient cash for a down payment. As a seller, lease options provide you with an opportunity to sell the house at a good price for you, while serving other financial benefits (especially in a slower market). Some of the benefits include charging a monthly rent higher than market rent, top-market value for the property and tax-free use of the option consideration until the option expires or is exercised. Because the seller still owns the home while it is being leased, you still collect the tax deductions from owning the property.

In addition, the lease option buyer is much more likely to take better care of the unit than a traditional renter because they will treat the home as if it was (or will become) their own. For this reason, even if they opt out of the lease arrangement, during their stay they provided higher than average monthly payments and possible improvements to the property.

Although there are a lot of benefits of purchasing a home through the lease option, anyone getting involved should do their own research making sure that it is the right option for them.

How do I find my Home?

Posted on 01. Apr, 2011 by irescan in FAQs

You Find It…We Buy It!

That’s right, you find the home of your dreams and we will buy it for you!

Our Programs provide you with the freedom to choose your new home. Once your application has been approved, we provide you with the maximum home-purchase value for which you are eligible and an approximate monthly payment for the home of your choice. Beyond that, the rest is up to you!

No Bank Qualifying Required!

Posted on 31. Mar, 2011 by irescan in Blog, FAQs

 Whether you are rebuilding your existing credit or establishing new credit, we can Help!

Conventional mortgages are restrictive and are only available to those who fit traditional criteria.

We at iRESCAN Corp., we do things differently because we truly understand that life’s circumstances should not prevent you from realizing your dream of home ownership! We care about you, your family, and our Great Canadian community. Together, we will build a nation of proud home owners!

Renters … Stop Throwing Your Money Away!

Posted on 31. Mar, 2011 by irescan in FAQs, News, Services

Renters … Stop Throwing Your Money Away!

You’ve been paying rent for years and have nothing to show for it. All because you’ve been told that for you, home ownership is an unattainable goal. Well, Innovative Real Estate Solutions Canada is here to tell you otherwise.

YOU CAN OWN YOUR OWN HOME regardless of your current financial situation. So stop putting money in your landlord’s pockets and start building your financial future right now. When you do, you’ll take advantage of benefits you just don’t get as a renter:

•Earn Monthly Credits:
Why throw away your money on rent when you can use it to build equity? From the moment you partner with Innovative Real Estate Solutions Canada, you start building up a down payment, one that will be used in the eventual purchase of your home.

•Enjoy Home Appreciation:
Any improvements that you make on your home will increase the value above and beyond your final price. This increase in the home’s value is yours to keep because your price is locked in from the start.

•Move In Now:
Why put your home ownership dreams on hold? You don’t need to wait to qualify for a mortgage. With our innovative lease to own programs, you can move into your home now and qualify with the bank later.

•Improve Your Credit Score:
Partner with Innovative Real Estate Solutions Canada today and we’ll work with you to improve your credit score starting right now so that you can obtain financing when your lease ends.

Stop wasting your money on rent and start putting money back in your pocket!
You can own your very own home and provide your family with the comfort and security you’ve always dreamed of!

Now Is The Time.
Interest rates are at an all time low and we’ve got more beautiful homes for sale than ever before — homes right in your area!

Remember, we’re not Realtors or Bankers. We own these homes. That means we can offer creative and innovative solutions to get you in your home and on track to realizing your financial dreams.

What’s that you say?

“I Have Credit Problems.”
Perfect! We’re looking for people with less-than-perfect credit. The fact is, if you’ve got perfect credit then you don’t need our help. If you’ve got a blemish or two on your credit report however, or if you simply don’t have enough of a credit history, we want to hear from you.

“I Don’t Have Enough Money For A Big Down Payment.”
Are you sure about that? We’re here to tell you to forget everything you’ve been told in regards to down payments. You don’t need $20,000 – $25,000 down payment to buy a good home. When you team up with us, you can buy your new home with as little as $5,000!

“Will I Have To Settle For A Home I Don’t Love?”
Absolutely not. First of all, you’ll be surprised how much home you can afford once we’ve put our innovative home-buying strategies to work for you. Plus, our inventory of homes has never been greater so there’s no shortage of beautiful homes to choose from. Finally, we’ll work with you… we’ll discuss your financial situation, the kind of home you’re looking for, and the kind of neighborhood you want to live in. So you can settle down in a place you can finally call your own without settling for a home you’re not happy with.

Ready to Get Started?
Simply CLICK HERE to complete the quick and easy “Application For The Lease Option Program” form located at the top of the Contact page. Then, one of our real estate experts will get back to you (usually within 24 hours).

Now, this part is important …

THERE IS NO COST TO YOU OR ANY OBLIGATION WHATSOEVER.

We keep everything simple, easy and hassle-free, and of course, everything is strictly confidential.

Again, now is the time.

The market is working in your favor and so will the real estate experts at Innovative Real Estate Solutions Canada.

Remember, every month that you continue renting, you are flushing your hard-earned money away and postponing your dreams. Start building up your equity right now and start saving for your future!

Contact Innovative Real Estate Solutions Canada today and we will give you and your family a whole new lease on life.

What if I reach the end of my Lease-Option period, and I find I cannot qualify for a loan?

Posted on 25. Mar, 2011 by irescan in FAQs

Our goal is to introduce you to a Lease-Option that will work for you. We require that we pre-qualify you so that we know that we can all be confident that at the end of the Lease-Option period, you should be in a strong position to purchase the home if you so choose. Should, for some reason, you not be able to qualify for a loan, we can then examine why and help you to work toward a resolution. If we cannot reach a resolution, you have the option of walking away from the property.

My credit is pretty bad; can I still qualify?

Posted on 17. Mar, 2011 by irescan in FAQs

It really depends on your individual situation. We are not like most financial institutions; we believe in providing everybody with the opportunity to own their own home. All we ask is that you are honest about yourself when you provide us with your credit information. We measure our success on the number of people we are eventually able to assist in qualifying for a conventional mortgage. We look at it this way…if you win, we win; if you fail, we fail. So if we cannot help you get into a home initially we will spend time with you to point you in the right direction so we can help you.