"Rent to Own" Signs at Exit Ramps Replaced With "Cash for Property"
Not long ago you could not exit a highway without seeing a number of “rent to own” signs that alerted potential homeowners to check out an available property; at this point in time the trend has shifted and – sometimes handwritten – signs proclaiming “cash for property” or “cash for houses” are popping up. Offering up cash for houses is not a farfetched idea when you consider that many a homeowner with an adjustable rate mortgage or even a recently refinanced mortgage is looking at a monthly net-loss rather than breaking even.
Yet while “rent to own” signs attracted eager buyers who were lured into believing that real estate was well within their financial wherewithal at the astonishing rate of only 2.5% interest per month (for the first six month), zero down, and interest only payments (for the first five years), “cash for homes” notices are now designed for the eager sellers who can no longer afford their dream of homeownership and have to concede that what looked great on paper for a brief period of time has turned instead into an albatross around their necks that threatens to ruin their financial future.
While the “sell home for cash” scheme may appear at first glance to be taking advantage of consumers taken in by creative financing ruses and loans which simply were not in their budgets, it is imperative to remember that there is a lot more to the story than meets the eye. The opportunity to utilize a sell home quick option is usually offered by groups of investors who have little interest in occupying these houses themselves and instead will prefer to simply rent them back to the original owners. Although not a long terms solution for many a homeowner, in the short term – say for six to 24 months – this is a perfect method for not uprooting the family and instead climbing out of a vast financial hole that was threatening to swallow whole the borrower.
Those not currently with their backs against the wall might wonder why a homeowner would consider selling to an outfit that was offering cash for houses and would then rent the same property back to them, yet if you will remember that more often than not many of these homeowners will find themselves close to bankruptcy, it becomes painfully obvious why this is truly the only workable solution for getting out from under a mortgage that is continuously rising.
Even as variable interest rates in the beginning appeared to be a blessing in disguise – after all, they enabled many a would-be homeowner to make that all important move into homeownership – the individual’s failure to follow through and increase income or refinance quickly has now left them in the bind were cash for property is truly all they can hope for. Many who are thus escaping foreclosure, creditor phone calls, and even forcible eviction consider they are fortunate and see their stint at homeownership as a lesson learned that came at a steep price indeed – softened sometimes by the ability to stay in their homes after the sale.
