How to Control the Emotions of Home Buying

Buying a home is almost always an emotion-based process. Once you find a home you like, you become emotionally attached to it. Emotional attachment can cause you to make unwise decisions when making an offer, handling negotiations, and so forth. Once you’ve fallen in love with a house and visualized it being your home, you’ll start to do WHATEVER it takes to make sure it becomes your home.

This is about the worst possible way to buy a home, but also may be the best possible home for you.  You do want to fall in love with your new home, but you also want to be careful.

You can literally cost yourself thousands of dollars, if not tens of thousands of dollars, by being too emotionally attached. Instead of letting emotions rule the game, try to include some common sense in the buying process. Real estate investors have a saying that goes, “Don’t fall in love with the house, fall in love with the deal.” This is easier for an investor as he won’t live there, but you should be aware of this, and use your head.

Having said that, I realize that you will always have some emotional attachment to your house. You need to like it. Your goal is to strike a balance between liking the house and using common sense to tell you whether you are sacrificing too much to try to get the house. If you find you have to make lots and lots of compromises to get a house, stop yourself and ask, “Is this really worth it?”

Remember to strike a balance between emotions and common sense in your home buying process. It will help you enjoy your home that much more once you actually move in.

5 Questions to ask yourself when purchasing a New Home

While you are looking at homes and once you make an offer on a home, there are some questions you should be asking yourself to help keep common sense involved in the decision making process:

This list is in now way complete. I invite you to add more questions in the comment section.

Here are five IMPORTANT questions to ask yourself:

1. Does the home work for you and does it meet your NEEDS
Remember the difference between wants and needs?
2. Do the numbers work for you?
Can you really afford this home?
3.  What sacrifices are you making to get this home?
It helps to think specifically about what you might be giving up for this particular home.
4.Will the home meet your needs for the near future?

Will your family be growing?  Are the kids going away to college?

5. Will you still want to mow that big back yard in a few years?

If you know that you are the type of person who easily becomes emotional in your decision making process, it might be a good idea to carry a note card with these four questions on it to remind you while you are looking!

Remember to strike a balance between emotions and common sense in your home buying process. It will help you enjoy your home that much more once you actually move in.

How to Get Sellers to Call You and Offer you Their Home for a Rent-to-Own

Now that we’ve discussed ways to find rent-to-own homes, what would you say to having rent-to-own sellers call you and offer you their home? That’s right. You can just sit by the phone and wait for sellers to call you and tell you about their rent-to-own home.

Many of these sellers will not have their homes listed with a real estate agent, so if you are working with an agent, this may not be for you.

The advantage of having the seller call you is that you already know he is willing to consider rent-to-own. You just need to figure out if his home and terms will work for you.

“Alright Wendy! So how do I do this?”

Posting ads is a way to get sellers to come to you.

Posting Ads

The first way is by posting ads about yourself and rent-to-own. Here is one example:

This is a sample ad of what you would put in the newspaper where space is an issue – the more space you use the more it costs you. These ads though are just enough to get the attention of a home seller who has started to think about what choices he must make if he doesn’t sell soon.

You can also post an ad on FREE sites like Craigslist, Yahoo! groups and Google groups. I also recommend posting some flyers on community bulletin boards as well as posting flyers using these FREE Internet sites. These methods are much cheaper than the newspaper classified ads and may be all you need.

The whole purpose of these ads is to filter out the home sellers who don’t want tenants and to get the ones that would consider tenants to call you.

Here are some questions you can ask sellers once they call you:

• Where is your home located?
• Can you tell me what price you are looking to get for your home?
• How many bedrooms and baths does it have?
• Do you know what the rental rates are in your area? About how much were you thinking for monthly rent?

Not only will these questions help you gain more information about the sellers, it will also help you build rapport with the seller as well.  Check out my book Rent-to-Buy to learn more about other ways to get sellers to call you.

Rent to Buy is your hands-on guide to buying your next home as a rent to own.  You can get your next home NOW without having to qualify for a mortgage until later.  To Learn more about Option Agreements purchase your copy of Rent-to-Buy today.

Feel free to comment and let me know of other ways you  have sellers calling you!

In the previous post I  discussed each contract and the basic points each covered.  Today, I am going to share with you the specifics of a Rental Agreement, the type you should have and some of the key clauses that should be included in the agreement.

Most good Rental Agreements take the guesswork out of the picture for you, making your life significantly easier. They do this by having all of the regular terms and conditions pre-printed. One important thing to remember is that you should NEVER draft your own rental agreements (or any other contracts for that matter) from scratch. Always use pre-created contracts (preferably pro-buyer) and just fill in the relevant details. Creating your own contracts can cause you enormous headaches and potential legal problems.

There are three different types of contracts:  Pro-Seller, Neutral and Pro-Buyer. You, as the buyer, will want pro-buyer contracts for your transaction, whenever possible. You can order these on my website if you don’t already have them. They offer you the most protection and the most favorable terms.   The type of contract can make a HUGE difference.  If you use the pro-buyer contracts, the seller is responsible for all repairs, or you can choose to share the expenses. Using a pro-seller contract or a lease from a real estate agent could result you might end up being responsible for ALL repairs to the property during your rental period.

Here are a few clauses you will find in my rental agreements that make them pro-buyer.

Insurance

It’s very important that the owner continue insurance. He or she is responsible for insuring his home during the rental period, not you. You will want to obtain renter’s insurance to protect your possessions, but the home itself must be insured by the owner (seller).

Maintenance, Repairs or Alterations

The Landlord gives the tenant the right to make repairs or improvements to the property at the tenant’s expense. This is where you will want to put in who will pay for what repairs. I personally like the owner to pay for repairs during the option period when I am the buyer.

Rental Payments

It is very important when you are doing a lease option that you make SURE the seller is paying his mortgage payment.  If he doesn’t pay it, your dream will become a nightmare.  I recommend you have your monthly payment made to their mortgage company versus to the seller directly.

Check out Chapter 7 of Rent-to- Buy for more insight into Rental Agreements.  Rent-to-Buy is a great gift for the Holiday’s.  Order  your copy  TODAY!!

Once you have set a budget and know how much you can afford for a home, it’s time to start thinking about what features you want and need in a home. Needs are things that, if they aren’t met, they won’t make the home functional for you or your family. Consider your needs, not just now, but also for the next few years. For example, if you don’t have any children now but plan on having some over the next few years, a one-bedroom cottage probably won’t be a good choice for you. On the other hand, if you have five kids, a home with one bathroom is just not practical. Take a look at your situation. If you have owned a home before it will be easier for you to determine your needs than if this is your first home.

It is important, however, to get an idea of your needs before you go out looking at homes so you aren’t just floundering around. It’s okay to refine your needs as you are looking at homes and think more about your future home, but decide on your basic must-haves beforehand.

Here are some basic needs you’ll want to consider:

1. How many bedrooms and How big do they need to be?
2. Do you need a garage?
3. Do you need a basement or other structure for storage, like a shed (of course, you don’t want a basement in Florida)?
4. How many bathrooms will be needed?

Think also about the specifics of your own situation. Will you have an elderly parent living with you? If you or a family member is physically disabled, can the home be two stories or should it only have one? If you have small children, do you need a fenced in yard? It’s impossible to cover every particular situation, but you know better than anyone what applies to the needs of your family.

Once you have established your basic needs for a home, it’s time to think about features you want. Check out chapter 3 of my new book Rent- to-Buy for an in dept look at how to establish your needs and wants.

Are you like many others who have no idea what a Rent-to-Own is? My new book Rent to Buy discusses what a Rent-to-Own is and much more. Rent to Buy offers a hands on guide to buying a home on lease option from the home buyer’s perspective as well as the real estate agents who serve them.

Before we can look at why we would want to buy a home and how to buy a home on a “rent-to-own” basis, we first need to understand what renting-to-own is. A rent-to-own can also be referred to as a “Lease with an Option to Buy,” a “Lease Option” or a “Lease to Own.”  In this book we will call it a “Rent-to-Own”, but these words can be used interchangeably for the most part.

In a nutshell, a rent-to-own sale means the seller is allowing you, the future buyer, to live in the home for a while as a renter before you actually purchase the home from them.

In a rent-to-own transaction, before you move into the seller’s home as a renter, you and the seller would agree on the sale price and other terms. You would pay the seller a non-refundable option fee. Both you and the seller would sign some paperwork covering the lease, the purchase and the option (which gives you the right to purchase the home at a later date) and in approximately one to three years, depending on your agreement, you have the option of purchasing the home.

I say you have the option of purchasing the home because it is important to understand that in a rent-to-own transaction you, as the buyer, are not obligated to purchase the home at the end of the rental period. The seller, however, is required to sell it to you should you choose to buy it. That sounds pretty good, doesn’t it? For a more in dept look  at Rent-to-Own’s check out my new book, Rent-to-Buy.

While this housing slump is making it tough for home sellers, there is a balancing factor that’s making it tough for home buyers.  I call it the “Credit Crunch”.

With the severe tightening of the mortgage lending industry, buyers are having a harder time getting mortgages. The subprime mess we’ve all heard about means that many buyers who could qualify for mortgages before are no longer able to. This may be your situation.

This “Credit Crunch” directly impacts you as a potential homebuyer. Unless you have A+ credit or a very large down payment, getting a mortgage may prove difficult. If you haven’t already spoken with a mortgage broker, you should do so to find out if you can currently qualify for a mortgage. If you have already spoken with a mortgage broker and you know you can’t qualify yet, you know about this “Credit Crunch”.

Many would-be buyers despair after talking to a real estate agent and a mortgage broker who tell them that they can’t help them because they can’t qualify right now. This is why you, as a buyer, would need to do something like rent-to-own. It gives you the opportunity to get into your future home now, before you can qualify for a mortgage.

You can learn about How the “Credit Crunch” affects You- The Buyer and more in my new book Rent to Buy. Rent to Buy is your hands-on, step by step, guide to buying your next home as a rent to own.  You can get your next home NOW without having to qualify for a mortgage until later.  This is the solution you need until you can qualify for a mortgage.  This is the solution home sellers need because they can’t find mortgage qualified buyers.  Rent to Buy is a great option in our current real estate market.  Check it out!

Is this you?

You’ve seen tons of homes for sale on the market.  You know it’s a buyer’s market.  You either owned a home previously or you are a first time buyer.  If you owned a home previously you might have lost it to foreclosure, either due to a job loss, divorce or your mortgage rate adjusting upwards.

Now is the time to buy!  After all, you keep hearing in the news about how BAD things are for sellers, and prices are the lowest they’ve been in years. This is true and it is to your advantage.  For most of us, home ownership is our single, biggest source of wealth.  It not only puts a roof over our heads that we can call our own, but it also builds security for our futures by paying down the mortgage and building up equity. For most people, their home is their single greatest asset.

Probably the first thing you did was to start looking on the Internet or checking the local newspaper for homes for sale.  After that, you called a Realtor® and he told you that he would love to help you, but you needed to get approved for a mortgage first. Ugh…you know you don’t have the best of credit and you are not sure if you should even call a mortgage lender.

You decide to make the call to a mortgage lender.  You know what the outcome will most likely be in advance, because of your financial situation, but you do it anyway. After gathering tons of information from you all the way down to how many times a week you floss, he finally tells you that based on your current credit, income, down payment, inadequate amount of time spent brushing after meals, etc. you aren’t currently qualified to get a mortgage. Well, duh! You could have told him that in the first place.  Do not despair.

Rent to Buy is now available.  Rent to Buy is your hands-on, step by step, guide to buying your next home as a rent to own.  You can get your next home NOW without having to qualify for a mortgage until later.  This is the solution you need until you can qualify for a mortgage.  This is the solution home sellers need because they can’t find mortgage qualified buyers.  Rent to Buy is a great option in our current real estate market.  Check it out!

In today’s real estate market mortgage-qualified buyers can be a real challenge to find which makes it difficult for us real estate agents to make a living.  In reality there are lots of would-be buyers out there right now if you are a little more creative.  You see, the real hang up comes with the mortgage-qualified part.  Lots of would-be buyers out there (in fact, I would say the majority) can’t qualify for mortgages right now.

Most real estate agents turn these people away saying, “I’m sorry, I can’t help you.”

But the truth is, if you are a little bit creative, like I teach in my book Rent-to-Buy, you can turn all of those buyers into full commissions by finding them a lease option home.  Not only that but you can collect buyer leads from other agents who turn away those not-mortgage-qualified buyers too!

How do I do that?  I have this letter that I send out to other agents called my garbage or $500 letter.  It goes something like this:

Dear Agent Name,

Have you ever had a potential buyer come into your office and not be qualified to get a mortgage?   Don’t throw away their information.  Refer them to us, and if we end up renting to them, we will send you $500!

So, is it a piece of garbage, or $500?

Please call us at (phone number) to get more information, but don’t throw away your potential buyers that we might be able to work with.  This offer is valid until (date).

Sincerely,

Your name

Very simple and straightforward, but very powerful.  Most real estate agents turn away non-mortgage qualified buyers.  Get them to give them to you instead and they’ll see a payout instead of a lead that is garbage.

The buyers are the gold in today’s real estate market.  If you are creative and help non-mortgage-qualified buyers find lease option homes you can earn a TON of money in commissions right now.  For more on how to do lease options as a real estate agent and how to help buyers find homes check out my new book, Rent-to-Buy.

Here is a tip on negotiating from my book Rent to Buy, which will be released on November 10th.  Rent to Buy is a hands on guide to buying a home on lease option from the home buyer’s perspective as well as the real estate agents who serve them.

One of the great things about buying a home as a rent to own is that you have a broad range of terms to negotiate when putting together the deal on your rent to own home.  This means that you can get creative and put together a deal that is good for you as the home buyer, or the real estate agent who is assisting their buyer, as well as still be good for the seller too.  If it’s a win-win situation you’ll have a much better chance of getting the home.

So here is one of the negotiating tips I talk about in Chapter 12 of Rent to Buy:

Don’t Give Away Anything without Asking for Something in Return

This tit-for-tat technique helps ensure that even if you are giving your sellers a key aspect that they want; you are getting something in return.  A good way to handle this is with a question, “If I agree to your asking price, how much per month in option credits do you think is a fair exchange?”

Or, you can ask for exactly what you want, “If I agree to your asking price, would you agree to give me $1,000 per month in option credits?”

By asking a question, you give the seller a chance to voice what they think is a fair exchange for what they are asking for.  It may turn out to be MORE than what you would have asked for.  If it isn’t enough, you can always negotiate up from their proposal.

By stating what you want, you are more limited.  The seller may even try to negotiate you down from this position.  However, if there are a few key things that you really want out of the negotiation, this is a good time to go after them.