5 Tips to Beat the Competition

Luring First-time Buyers
5 Tips to Beat the Competition

By Amy Hoak
RISMEDIA, June 19, 2009-(MCT)

A federal tax credit of up to $8,000 is nudging many Americans into buying a home for the first time, good news for those trying to sell one.

Still, selling a home isn’t easy in most markets today. To get the typical first-time buyer to bite and submit an offer, a house has to stand apart from the competition – and there’s a lot of it, including foreclosure homes that are selling at hefty discounts.

One big thing working in favor of the traditional seller: A lived-in, maintained home is easier for buyers to imagine themselves living in than a vacant foreclosure. That has great appeal for someone buying a home for the first time, for practical and financial reasons.

In fact, while nearly half of brokers polled for a survey last year found that affordability was the No. 1 concern for first-time buyers, 81% said move-in conditions were very important to these buyers. Only 7% said first-time buyers were looking to purchase fixer-upper homes that they could buy on the cheap and renovate.

Those feelings are likely just as strong today as lenders generally require larger down payments, unless the mortgage is backed by the Federal Housing Administration. Higher down payments means buyers have less cash left over for improvements.

While foreclosures that are in severe disrepair can be a huge turnoff for a first-time buyer, some banks will make improvements to their foreclosure stock, fixing them up so that they meet FHA standards and a buyer’s needs. These homes can be stiff competition for the rest of the for-sale inventory.

Never fear, there are still ways to outshine other homes on the market. Assuming the home is priced correctly, here are five ways to lure a first-time buyer:

1. Maintain and Stage. A home that has been taken care of throughout the years will offer a stark contrast to a vacant, empty foreclosure.

As with any home, a fresh coat of paint, decluttering and the removal of unpleasant odors can go a long way to making a good first impression. But be careful not to over-improve the home, because the investment might not be worth the cost.

2. Mention Up Front That You’ll Help Pay Closing Costs. Whether it’s in the marketing material or in the listing, this could be an extra motivator to reel a buyer in. Generally, there’s a good chance they’ll ask for closing cost help anyway, but it might pay off to be proactive and offer it at the beginning.

If rising mortgage rates have your buyer spooked, consider paying mortgage points to bring the rate down. But consider a buyer’s timeline for staying in the home before deciding if this is the most effective way to help; paying points generally makes sense for those staying in a home for more than a few years.

3. Offer a Home Warranty. First-time buyers are often coming from a rental, and they are used to calling a landlord when there’s a problem. To help them more easily transition into homeownership, provide them a warranty that covers major systems when problems arise.

4. Offer Mortgage Protection. In some cases, it might make sense to address buyers’ fears by purchasing insurance so they can keep up with their mortgage even if after losing a job.

5. Don’t Snub Low Offers. Buyers know prices have fallen, so they’re being aggressive in their offers-sometimes extremely aggressive. But even if they come in with a shocking lowball offer, don’t scoff at it. Understand where they’re coming from, and try to compromise.

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

Source:  http://rismedia.com/2009-06-18/luring-first-time-buyers-5-tips-to-beat-the-competition-sell-your-home/#ixzz0J9ye4MHb&D

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Down Market? How about an Ideal Opportunity?

Down Market? How about an Ideal Opportunity?
RISMEDIA, June 4, 2009

With the passing of an $8,000 tax credit for first-time buyers, much has been made about the great opportunity available to those who have never owned a home. Yet, the reality is that today’s market offers just as many advantages for existing homeowners wishing to move-up to a larger home.

The Financial Benefits

Given the recent decline in home prices, some homeowners are understandably hesitant to sell their home. However, when you factor in the cost-savings on the home also being purchased, trading up now can produce a very positive financial outcome.

Take for example a homeowner who paid $200,000 for a home several years ago. If prices in their market declined by 10%, they would experience a $20,000 loss upon the sale of their home. However, if they are also buying a larger home that had cost $400,000; they would now benefit from a $40,000 savings on their purchase. This is a $20,000 gain in overall equity as a result of moving up. In addition, when prices begin to rise, this trade-up buyer will see greater appreciation in their new home than their previous one.

More House for Your Buck

With home affordability at a record-high and interest rates at a record-low, those looking to move-up can get more for their dollar today than at any time in recent memory. For some this historic buying opportunity can translate in to a home with more bedrooms for the kids or a bigger yard where the dog can play. For others it might mean a larger dinning room for entertaining family and friends.

Whatever the reason, today’s market makes it possible for many trade-up buyers to afford a home they couldn’t just a few years ago and might not be able in a few years to come.

In the Middle of the Action

Perhaps the biggest advantage for trade-up buyers is the fact that they are in the middle of the real estate action – literally. In most cases, the home they own is in the best-selling segment of today’s market, while the home they wish to buy is in a price range that is seeing far less activity.

According to the National Association of Realtors, for the first-time ever, more than half of all buyers are now first-time home buyers. More often than not, the properties these first-time buyers want and can afford are the homes currently owned by move-up buyers. As a result, trade-up buyers who own starter homes that would be attractive to a first-time buyer may have a much easier time selling than they expected.

On the flip side, those looking to move up benefit from the reality that there are less people looking to buy larger, higher-priced homes. This lack of activity at the higher end of the housing market offers move-up buyers more negotiating power and affords the opportunity to be more selective. It also provides the very real possibility of even greater savings on the buy side during the trade-up process.

What remains unclear is just how long this opportunity to move-up to a larger home at an affordable price will last. After several years of price declines, many financial experts are predicting the market is close to a bottom. In addition, the government’s continued involvement shows that it is committed to stabilizing the housing market to stimulate the economy. At the same time, there is much speculation that interest rates may begin to rise in the near future after remaining stagnant within the same range for several months.

source:  http://rismedia.com/2009-06-03/down-market-how-about-an-ideal-opportunity/#more-37026#ixzz0JA7ap98k&D

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Make an Attempt to Avoid Foreclosure

Make an Attempt to Avoid Foreclosure
A total of 3.2 million foreclosure filings from default notices, auction sale notices and bank repossessions were reported on 2.3 million U.S. properties during 2008, a 225% increase in total properties from 2006, according to HUD statistics.

The challenge to everyday families who typically pay their home payment on time is overwhelming. Double-digit unemployment rates coupled with ever-worsening economic conditions are leaving American families tapped out. Now is the time to implement a strategy because a solution may exist.

So what should homeowners do when they start falling behind on mortgage payments? The most important step to take is to get help early from their mortgage lender. They should be prepared to provide details about their household, such as how much money they earn, all the bills and household costs, such as food, electric, water and even pet expenses.

Some options a lender may offer include:

Deferment-If the problem is short-term they may bring the homeowner’s account up to date and “defer” late payment expenses to the end of your loan. This usually still requires a partial good faith payment.
Repayment Plan-You may be able to catch up on missed payments by creating a schedule for repaying the past-due amounts.
Refinance-Fixed 30-year rates are very low and often can provide the lower payment relief and fresh start that some homeowners need.
Modification-In some cases, mortgage loan terms can be changed on a temporary or permanent basis to make the payment more affordable. This could include extending the term of your loan up to 40 years, reducing your mortgage interest rate and reducing or deferring your principal balance.

If you aren’t able to get help through your lender, then please call Certified Distressed Property Expert, Amy Kite, 847-877-9881.  Let me review your situation and see if there are any other solutions we can come up with together.

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My Credit Score Dropped 87 Points Because of Me

My Credit Score Dropped 87 Points Because of Me
Market Issues by Jeff Mandel and Marlin Brandt
RISMEDIA, June 10, 2009

Everyone has become more concerned about their credit scores these days, especially when a better score can result in lower credit interest rates and payments saving thousands of dollars from interest. With this in mind, many consumers are paying more attention to their credit and, unfortunately, in the process of trying to make it better, they are harming their credit score.

Take a recent client we will call “Rachel.” Rachel was reviewing her credit and decided to close her eight-year-old VISA credit card with a credit line of $18,000. She didn’t use the card but once or twice a month and had two other major bank cards that provided “rewards points.” So to keep her credit record “clean” she decided to cancel the card. The next month she found out that this one decision cost her 87 points on her credit score, dropping it from 752 to 665.

This story happens way too often and is typical for how most people manage their credit by trial and error. Over a lifetime, many people eventually build up some decent credit, however, that same level of credit could have been achieved so much earlier in life with guidance and help.

A consumer credit score is made up of five key components:

- Payment History – 35% Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
- Amounts Owed – 30% Balances of current loans, debt-to-credit ratio, proportion of installments still owed, etc.
- Length of Credit History – 15% Time since accounts opened, last activity, etc.
- New Credit – 10% Recent inquiries, new accounts, etc.
- Types of Credit Used – 10% Mortgages, credit, retail, etc.

In Rachel’s case, the major bank credit card she canceled was paid on time every month for eight years. She didn’t use credit a lot, and this particular credit card represented the best contribution to the amounts owed and length of credit history category. Although Rachel had two other major bank credit cards that offered rewards points, they were only months old and had only been used intermittently, giving them much less value on her credit score. Next to her mortgage loan, the eight-year-old VISA credit card was her strongest piece of credit. Consequently, the other newer cards also had higher interest rates and yearly fees than her VISA card.

Contrary to popular belief, credit scores do not penalize you for having too much available credit. With this in mind, it’s better to preserve your credit score with 15 years of established credit history and old accounts in good standing than to have fewer and newer open accounts. Major bank credit cards have more impact on your credit than, say, a department store card.

Closing a credit card can greatly affect your credit scores; however, sometimes you may have no choice. Credit cards that are unused or rarely used can have their credit line reduced or may even be closed without your approval by the credit card company. This can affect your credit score just as much as canceling the card yourself.

Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.
For more information, please visit www.ApprovalGUARD.com.
Source:  http://rismedia.com/2009-06-09/my-credit-score-dropped-87-points-because-of-me/#ixzz0JA29bkHT&D

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5 Tips on ‘Techorating,’ the Latest in Home Decorating

5 Tips on ‘Techorating,’ the Latest in Home Decorating
By Joan Morris
RISMEDIA, June 17, 2009-(MCT)

The latest thing in decorating is combing interior design with technology,  thus “techorating.” Doug Wilson, a well-known designer on TLC’s “Moving Up” and “Trading Spaces” offers tips on how to pull it off. Wilson also serves as a techorator for LG. He offers the following:

1. Stay focused. Don’t try to tackle a full house remodel all at once. Pick one or two rooms that you think would best benefit from an update and start there.

2. Pick a focal point and begin your efforts from there. If you are working with a larger living space, remember not to go overboard with one particular theme, pattern or technology. With just a few integral pieces, the room can be made to feel spacious, yet comfortable.

3. Consider the space. Remember, the size of your room matters, but bigger isn’t always better. The technology in your room should be in proportion to the room for the best aesthetic and functional fit. Look for the best integration over size.

4. Keep a clean design. With the TV, speakers, DVD players and more, people today need to practice cord control. New technology and a few easy steps make it easy to maintain a cleaner, more organized look. Go wireless to give your living space a crisp, modern feel.

5. Donate your old TV and bring in a new flat-screen for an instant style upgrade. Tabletop or wall-mounting for a flat screen can add space to your room and streamline the look and feel.

© 2009, Contra Costa Times (Walnut Creek, Calif.).
Distributed by McClatchy-Tribune Information Services.
Source:  http://rismedia.com/2009-06-16/5-tips-on-techorating-the-latest-in-home-decorating/#ixzz0JA0z4Bbt&D

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5 Pro Tips Designed to Help You Move

By Nara Schoenberg RISMEDIA, June 16, 2009-(MCT)-

How hard is it to move all your worldly possessions from one home to the next? So hard that even Clive Pearse of HGTV can get it wrong.

“I’m a bit of a hoarder, and-spectacularly-when I moved from England in 1997, I packed up an entire house of rubbish and brought it with me across the Atlantic,” says Pearse, who hosts “Designed To Sell.”

“I should have got rid of it and saved money.”

Also in the bad news column: “The average American will move 12 times in a lifetime. A lot of people feel like they’ve moved 12 times after doing it once.”

But enough with the doom and gloom! Our favorite trans-Atlantic trash-hauler is here with five ways to lighten your load, both literally and figuratively. Or, as he puts it, “A man gives tips after he’s learned the hard way, huh?” Hey, whatever works.

1. Don’t move it if you don’t want it. “People pay a lot of money to move all the clutter they don’t want or need,” Pearse says. Instead, identify the unwanted items and get rid of them in a garage sale. If that’s too much work, consider donating the discards to a charity.

2. Packing material at your disposal. Save money and environmental resources by using free and recyclable packing materials. Many large supermarkets will give away boxes for free. If you have time, start hoarding newspapers and junk mail. Use the newspapers to wrap fragile items. Shred the junk mail to make a great green replacement for bubble wrap.

3. Surf for techno help. Let someone else figure out which cable, telephone and Internet service to get at your new home. “As someone who is terrified of technology, this is my favorite tip,” says Pearse, who recommends a site created by cable companies, Cable Movers Hotline (cablemover.com.) Also available is Movearoo (movearoo.com), a site offered, in part, by telephone companies.

4. Moving advice for your possessions. If you use a professional mover, pick a reputable company by means of a referral rather than an advertisement. And avoid stress by setting aside your precious knickknacks and important paperwork and moving them yourself.

5. Start with a list. Don’t know where to start? “Take a long, hard look at each room very quietly and make a list of what has to go, what has to stay,” what has sentimental value and what doesn’t, Pearse says. Go room by room, item by item. “Once you get going, it’s very easy.”

©2009, Chicago Tribune.
Distributed by McClatchy-Tribune Information Services.

Source:  http://rismedia.com/2009-06-15/5-pro-tips-designed-to-help-you-move/#ixzz0J9xf2YAG&D

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Value Added Home Improvements

Improving your home with the sale in mind is a good idea if it is important that you recoup the majority of the money you put into the project. Experts agree that any remodeling project that brings your home up to the level of your neighbors’ is a worthy investment. However, some improvements offer a greater return than others. It depends on the type of work you have done. Remodeling magazine publishes an annual “Cost vs. Value Report.” The most recent report, based on the top 16 home improvements for a mid-range home, says the highest remodeling paybacks have come from vinyl siding replacement (with 87.2% of the cost recouped), wood window replacement (85.3%), minor kitchen remodeling (85.2%), bathroom remodeling (84.9%), and vinyl window replacement (83.7%).  Be honest with yourself as you walk through your home.  Maybe a countertop upgrade in the kitchen is all that is needed. You can get some great new vanities for a reasonable cost today at your local home improvement store.  Do you need to improve the flooring?  If I can help you make a decision on the best place to make improvements, give me a call at (847) 877-9881.  I would be happy to help.

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Banks Abandoning Foreclosures

Just when we think it can’t get any worse for the homeowner in distress, think again.  In areas with heavy foreclosure rates the banks are refusing to take back the property from the homeowner.  Instead the owner remains liable for the upkeep.  If the property should become so dilapidated the community or alderman may require the property be torn down and the bill sent to the current owner.  Now the person in distress has a bill for $15,000+ for the cost of demoing and removing the debris.  There are areas in Chicago where these properties are being torn down while they are listed for sale.  We have actually had a property under contract and when the client went to do the home inspection the house was in the middle of being torn down.

Another situation we are running into today on these short sales is the property owner vacating the property before it is sold and not paying for monthly upkeep or utilities.  Most areas have a code enforcement department that will fine the individual homeowner if the exterior of the home is not kept in reasonable shape.  Sometimes the water or utility bills haven’t been paid and in order to get the home inspected and sold they need to be paid in full.  The home and its upkeep and utilities are the responsibility of the homeowner until it is someone else’s responsibility which usually means ‘sold’ or if the individual does a ‘deed in lieu’. 

For more information read the article below by Tom Kerr of MortgageLoan.com.  Click here for a direct link to the article.  If you are considering selling your home or purchasing a distressed property contact Amy Kite, Keller Williams, 847-877-9881.

Banks Abandoning Foreclosures
By Tom Kerr MortgageLoan.com

The homeowner strategy of walking away from foreclosure homes when home values plummet below the outstanding mortgage balance has now been given a new twist by lenders. Banks are refusing to take back foreclosure properties, leaving homeowners to assume responsibility for their upkeep.

A new foreclosure-related trend is beginning to take shape, and it raises troubling questions about the role of home values and bank sales in preventing foreclosure. In cities across the U.S., banks are forgoing their right to take possession of properties that have been foreclosed upon, and are canceling the bank sales at the last minute. Instead of putting homes on the auction block, lenders are simply walking away, leaving homeowners and city officials in a confusing and frustrating legal limbo.

Low home values breed walk away phenomenon
The so-called lender “walk away” phenomenon is the latest bizarre twist in the prolonged foreclosure crisis, and may signal a whole new wave of foreclosure problems that were completely unforeseen. Banks are discovering that owning foreclosure properties is more expensive than it’s worth, because home values are so low. To save money, they don’t even bother paying for a foreclosure auction. They just contact the homeowner and inform him that the foreclosure process has been halted, and that he’s still fully responsible for any financial or legal liabilities related to the house.

Failure preventing foreclosure
Most of these homeowners have already vacated their properties after enduring the heartbreak of foreclosure. In their absence, the properties fall into decline, and often become targets of vandals who strip them bare of fixtures or pipes that can be sold for scrap metal. Many residences are condemned by city officials and are slated for destruction, especially in cities and neighborhoods where foreclosure blight is a major headache. In foreclosure-plagued Buffalo, New York, for example, city officials sued nearly 40 banks last year for abandoning dozens of homes that fell into a state of deterioration. But in recent months, that kind of pass-the-hot-potato scenario has played out in cities across the country, where banks are systematically walking away from situations where home values are too low to even justify the cost of a foreclosure seizure and subsequent bank sale.

The responsibility typically goes back to the borrower in default, who’s then hit with the huge liability of owning a worthless property that’s costing both him and the city money. Homeowners who have accepted the loss of their homes and are struggling to put their personal and financial lives back together, suddenly find themselves in a much more complicated situation. Both the bank and the city hold them liable for an uninhabitable home that’s still technically theirs. The distressed homeowner, whose name is the one on the deed and the title, may get a bill for the cost of demolition. And the cost to tear down a worthless home and remove the rubble can run into the tens of thousands of dollars.

Source:  http://www.mortgageloan.com/banks-abandoning-foreclosures-3150?strip=true

If you are considering selling your home or purchasing a distressed property you should work with an agent experienced in these types of sales.  Call Amy Kite, Keller Williams, 847-877-9881.

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Using Feng Shui in the Sale of Your Home

Using Feng Shui in the Sale of Your Home

Can you overcome a difficult real estate market to sell your home by encouraging positive energy to enter it? What if you want to sell that home today? Are there things you should do to energize it before putting it on the market? Are there rules to follow, principles to use as building blocks to create a good energy foundation for selling a property?

There are a number of things one can do to bring positive “buyer’s energy” into a home, and yes, there are some basic rules to follow. When your specific desire is to get that home sold, then you will need to focus your energy in the areas most important to selling a home. Feng Shui is the ancient practice of using positive energy in your surroundings to bring about desired results, which in this case is the sale of a home.

The following steps are based on basic Feng Shui principles, which will not only help create an environment that is welcoming to buyers, but will also help your client sell his/her home faster and more easily.

1. Boost the curb appeal. To prepare the house for sale, begin outside in the front of the home. The old saying “curb appeal is everything when selling a home” is the absolute truth. If the front view of the home is not appealing and inviting, a prospective buyer will pass right by.

It is important to have beautiful border plantings leading the eye of potential buyers up to the front door of the home encouraging them to enter and linger. The best colors for these plants are hot pink, yellow or red because they are energizing colors. On the front door, place a wreath with silk flowers in the same color. If there are double front doors, be sure to place a wreath on each door. If you cannot place a wreath on the door, place a cluster of three or five pots near the entry. These pots should be of varying heights with plants in the same color as the border.

Since we live in a part of the country where outdoor plants do not survive in the winter, be creative and use other things to lead the eye to the front door such as a flag, an artsy arrow pointing toward the door or a brightly painted front door that harmonizes with the home.

2. Clean up now! Upon entering any home, a potential buyer likes to see a clean, uncluttered house so they can visualize their own furniture in various rooms. Remove all excess furniture, magazines and clutter. Start with the master bedroom and bathroom, then the kitchen and living room. Follow this same process throughout the remainder of the house and garage. Collectibles, family pictures and valuables should be packed away before the house is placed on the market. To the new Generation X-ers and Y-ers, collectibles mean clutter. The younger generations like a house with lots of open space and few “dustables.” Closets, especially the one in the master bedroom, are also very important; they must look organized and feel spacious.

3. Repair, fix and replace.  Take a look at the cabinets, door fixtures and faucets. Fix all cabinet and closet doors, dripping faucets and repair all locks on exterior doors. If the majority of the common rooms (i.e. kitchen, living room, family room) are painted bold colors, repaint the walls a soft, neutral color. Remember, the goal is to please a potential buyer, not make a statement about who the seller is.

Almost 70 percent of our population prefers the energy of light, neutral colors on their walls and selectively uses the bold colors for accents only. Don’t eliminate 70 percent of potential buyers simply because of the colors on the walls.

4. Organize, organize, organize! Keep children’s rooms and guest rooms organized and odor-free. Pick up and put away toys, pack away any personal items and make sure toiletries are placed out of sight. Do the same for the areas your pets frequent. The old adage “cleanliness is next to godliness” is still a rule of thumb when selling a home.

5. Use a subtle fragrance to create a welcoming atmosphere. Place softly scented candles in areas of concern, including bathrooms, and burn them for at least half an hour before the house is to be shown to create pleasant smells throughout. Use a candle in the kitchen with the subtle fragrance of something “homey” and familiar like apple pie and cinnamon in the winter or lemon in the summer. Potential buyers not only want their new home to look clean, but smell clean as well. It is also helpful when the fragrances are reminiscent of positive family memories such as a holiday meal at grandma’s house.

6. Increase the buyer/seller relationship’s energy. In the southwest area of the family room or living room, place a beautiful bouquet of flowers in earth tones such as peach, salmon and brick red, to focus energy on creating a good relationship with the Realtor and the potential buyer. It can be a simple arrangement of three large, beautiful flowers, or it can be a whole bouquet representing many potential buyers.

7. Attract helpful people. When selling a house, it helps to get as many people involved as possible, such as family members, friends and business associates. Energize “helpful people” in the northwest area of the family or living room with something silver. A trophy, a silver vase or bowl or even a picture of a lot of friends or a team of business associates framed in silver will work. The more people that are helping out, the easier it will be to sell the home.

There aren’t many rules when using Feng Shui to sell a home, but they are critical to ensuring that the home will appeal to as many potential buyers as possible. Your listing competes with every other house on the market at or near its price range, including those wonderful, new model homes. Providing great curb appeal with cheerful colors outside encourages the potential owner to “come on in and stay awhile,” which is essential. When you add to that cleanliness, uncluttered spaciousness and great positive energy, the home will stand out from the crowd and you will have a competitive edge for selling your home.

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Lease Option/Rent-to-Own: Is it something YOU should consider?

There has been an increased buzz and more people asking about lease options and rent-to-own properties.  These can be great opportunities for both buyers/renters and sellers.  If a property is vacant and the seller is open to renting the property they ought to consider doing a lease option/rent-to-own.  If someone is looking to buy in the next couple of years they may like the idea of moving into the property they are going to buy now saving moving expenses let alone some of the other great benefits. 

Why do people lease option or rent-to-own today instead of buying right now?  There are actually many reasons:  credit isn’t at the level it needs to be to purchase, they have had a bankruptcy or foreclosure within the last 2 years, going through a divorce (if they purchase it could be considered marital assets), moving into a new area, don’t have the down payment, haven’t been in their job long enough, or insecure about their job/company to name a few.

I call lease options/rent-to-owns the Wild, Wild West.  Everything here is negotiable.  Let’s look at each component.  Close date-how long does the buyer need in order to be able to close?  Is there a timeframe the seller NEEDS?  Rent-this depends on whether the new owners need some of the rent to go toward purchase price (if they do it MIGHT be increased), Security Deposit/Non-refundable option consideration money-this is money that may not be returned if the buyer backs out of purchasing the home.  Purchase Price-you might need to come in with a full price offer depending on what else you are asking for.

If you or someone you know is looking for a rental or considering a lease option it is very important you work with an agent who understands them.  Please let me know what I can do to help.  Contact me at (847) 877-9881,  amy@amykite.net or www.amykite.com.

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