Realty Pupil - Secrets of Real Estate

Having poor credit and trying to purchase a home is increasingly becoming nearly impossible as more and more lenders choose to avoid offering mortgages to high risk clients. Sadly mortgage brokers still encourage clients to attempt to get these loans, even when there are few to no loans that can actually be given. This provides many with a false hope that they may be able to some day qualify for a home loan, or they simply believe that within a years time they will be able to resolve their credit issues and have perfect credit. Something much easier said than actually done.

Generally, people who find themselves opting for a lease to own purchase are not very wealthy, educated, or are in desperate circumstances. People in these categories are in a terrible bargaining position, never use attorneys to look over contracts, and will likely not afford to, or choose to actually fight when the landlord decides to not sell the property to them.

Lease options are like no-credit here car lots. The goal isn’t really to sell you the home or car. The goal is to get you to hand over a lot of money, either as a down payment, or as lease payments with the idea that you’re an “owner”, and then get the house or car back on a technicality, so it can be “sold” again.

Even if the landlord isn’t acting on evil intentions, the situation of poor credit will probably not change in a years time, thus ensuring that the home is never purchased. Don’t think that Sub-Prime mortgages are going to be any easier to get in a year’s time.

I recently wrote about the possible appeal for real estate investors in purchasing homes using lease-to-own contracts.

As I stated then, I wish to reiterate that it is plumb stupid to purchase a property without having an attorney examine the rent-to-own contract first. Most rent-to own contracts end in in eviction, or in the buyer not actually purchasing the property, often because of contractual fine print.

If you aren’t careful, you may end up with a contract that makes it more profitable for the seller to evict you than sell to you. Guess which option will be selected. Remember, the whole point of a lease-option deal generally isn’t for the landlord to sell the property. It’s just a way for the landlord to collect 110% of the normal rent, and have the renter fix the place up real nice, and have the renter be responsible for the unit’s repairs.

Lease-option contracts will usually include some incredibly strict default clauses. For example, if you are late paying the rent just once, the deal is off, or if you violate any one of a number of other small infractions.

WRONG. Legitimate businesses don’t recruit distributors with the prospect of selling to, or recruiting other distributors. Instead, they focus on the prospect of selling to retail customers.

If you find yourself invited to a ‘Free Real Estate Seminar’ or have a friend pushing you to attend with him or her, fake a major illness, run to Mexico, or just plain say no. Real friends don’t let friends attend real estate seminars.

Why? Chances are you’re familiar with Timeshare presentations. You get a free hotel room, or a discounted trip in return for agreeing to attend a ‘90′ minute course that quickly spins into an all day full court press in which sales agents do everything imaginable to persuade you to buy a highly inflated timeshare.

Who in their right mind would fall for something so incredible wasteful? Everyone. They give those free hotel rooms because people are easily suckered. The same applies for the ‘free’ real estate seminars. You’re really attending a long sales pitch aimed at persuading you to spend thousands of dollars to ‘learn more’ in further seminars. Most people find that the ‘free’ vacations, trips, and seminars they attend end up being by far the most expensive.

If you ever find yourself being pushed to join up with a company that operates via referrals and multi-level commissions, RUN.