End Home Sales Stagnation To The Rental and Rent-To-Own - Tackling High

Real everywhere are breathing a sigh of relief with home sales rise in April and May. Things picked up a little it seems, they have some money in their pockets, and it seems that the light at the end of (what was) a very dark and long tunnel with a decrease in their sales activities.

While the end of the tax credit, it seems that Roadrunner can only have when lathered with white paint on the wall in front of pending home sales are falling fast.

The owners of higher end homes in Charlotte, here defined as a maximum of $ 304K FHA has never seen the light. They are beautiful homes that cost is relatively small (too small and they would say I agree!). Their house still is not selling them, and the monthly nut is just sucking the life from them. Unfortunately, the banks now require much more (700 credit scores and 10% down minimum) from potential buyers for these homes, there can be no liquid market.

So where does that leave them?

Many of these homeowners do not want to go short sale restrictions or route. They also do not like, they know that their homes have a value that the market will not recognize at the time. Their sterling reputation and credit scores with his former neighbor means something. They just do not want to walk when they can still afford the monthly fee, because of conce
is the monthly payment.

Many understand that they need to solve them for the past few years. They begin to explore the lease and rent to own options. They have heard horror stories that people tell about the tenants, but they can also carry out basic math.

What can I say?

Let's take a $ 800K house, for example, and say the monthly cost is $ 4K. The current market value is $ 600k. They can rent it for $ 3K. We assume the two-year lease.

Not rented:

1st Loss of $ 4K + (monthly payment, utilities, other holding costs)

2nd Maybe sell it for $ 600k at a time once, it is the free market

Mathematics: If you do not sell, they are looking at $ 100K + loss two years (24 months X $ 4K + holding costs), or (if supplied) $ 200K potential "loss" on sale

Rent:

1st Loss of $ 1K per month ($ 4K - $ 3K) for the monthly rent, in relation to their costs

2nd Suppose that the (medium-to-bad case of irresponsible tenants): $ 15K damage, when the tenants leave (if they do not buy)

Mathematics: Decrease of $ 39k ($ 1KX 24 months + $ 15K damages) if they can not purchase or market value (about $ 800K depending on the home valued at the time of sale) the realization of a year or two, if the tenant purchases (up to a bike the same scenario).

Thus, the results look like this:

Keeping your home free market: $ 100K - $ 200K loss

Rental or lease-To-selling your home:> $ 39k damage

Is it any wonder why rent or lease, with the opportunity to gain traction upper class household in this economy?