Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

I want to share some exciting news with you. I spent some time last week becoming a Least-To-Own Certified Agent. I really believe that this is an innovative program that will help both Sellers and Buyers alike during these difficult times.

So, what is this Lease-To-Own program all about? I’ll try to briefly explain. There are too many nuances to explain it all here. Contact me so I can answer all your questions or post questions on this blog and I will get you answers.

First of all, this program is very different from a traditional lease/purchase or lease/option. As the program administrators define it, the Lease-To-Own program is a controlled borrowing process where renters (prospective buyers) “audition” to become homeowners under ongoing supervision.

What does that mean? Right now because of the tough market in the Tampa Bay area and throughout the country, buyers need to have near-perfect credit scores and/or huge down payments. Because of these tough financial times, many don’t. A potential buyer may have had a short sale in their past or might not have the money for a down payment. Nevertheless, they may have good jobs and the ability to pay rents and own a house moving forward. It has been found that many of these renters pay their rents on time and are stable credit risks.

So how do these renters audition for home ownership? The renter/buyer goes through a qualification process that includes a review of their credit, income, debt, and rental history. An assessment is then made to determine the renter’s ability to get financing at the end of the lease period. The renter/buyer signs a purchase contract on the home for the current appraised value with a closing date of 18 months out. The renter also signs an 18 month lease on the property. The renter pays a lease payment made up of principal and interest, taxes, insurance, homeowner’s fees (if any), property management and credit counseling. The renter is also responsible for any other costs associated with home ownership such as utilities, phone, cable, etc. During this time, the renter is receiving on-going credit counseling to improve credit scores, save for a down payment and enable them to obtain permanent financing through a lender of their choice.

So, what’s in this for the Seller? The Seller will have a Buyer for the home albeit 18 months out. However, during this time the Seller is collecting rent and covering taxes, insurance, etc. The renter is looking as this as their permanent home and will maintain the property far better than someone who is renting it for a period of time and then moving on. Most importantly, the rent is guaranteed (underwritten by Lloyds of London). If the renter should default for any reason and not pay the rent, the program will continue to pay the Seller for the remainder of the lease. As part of the program, the property is covered by a Home Warranty. So, if anything does go wrong, the renter calls the home warranty company and pays for the service call. Remember, the renter/buyer will be auditioning for home ownership and must be able to manage all that is involved with home ownership.

If you are a Buyer with a credit score of at least 550, a job and the ability to pay rent, give me a call. If you are a Seller who is current on your payments and wants to move on, give me a call. This program could be your answer!