Today's real estate market requires innovative thinking. With inventory levels at an all time high in the Grand Rapids, Michigan area, (2X as many homes for sale now as there were 5 years ago) home owners, prospective home buyers and agents have to think outside the box to make transactions work.
Add to the mix the mortgage crisis, which effectively axed a large number of "would be buyers" out of the market, and you have a really interesting jigsaw puzzle when it comes to figuring out how to put a transaction together.
But, there is one area of the housing market which is seeing some increases in activity. This is occurring in the rental market for homes! Over the past several months, our office has received a number of calls inquiring about homes for rent. We've fielded calls from different parts of the country as well as the local Grand Rapids, Michigan area. With the glut of housing in the market, you'd think that it'd be easy to find homes to rent. Not at all! In-fact, the opposite has proved to be the case. It has often required an exhaustive search to find suitable homes...or a sprint to the finish line to get an offer in before 3 other offers have been tendered on the nicest properties!
I often wonder if home owners desperately trying to sell their properties are aware of this emerging dynamic in the housing market. When I see homes VACANT on the market for 236 days or 359 days, I wonder if these home owners know they could have been earning income while they waited for their homes to sell?
There are so many tools available to real estate agents in the Grand Rapids, Michigan area to assist home owners who need a little support while they wait to sell their home. These include the ability for homes to be listed "For Lease" in the Multiple Listing Service. This increases the exposure of the home for rent to prospects who are serious about buying a home...generally a higher quality lead pool than prospects who are only interested in leasing. In addition, a web savvy agent can significantly enhance a listing and chances for a Sale or Lease by uploading the data to a number of websites such as craigslist and rent.com and advertising on their website or blog.
When our office gets these calls, we begin to mine the MLS database looking for prospects who might be interested in making money while they wait for a home sale. In addition to assisting our prospective clients in locating suitable homes, we will also approach the Listing Agent and ask them to inquire about the possibility of renting with an option to purchase. We're surprised by how often this has not been discussed and how many sellers, who have vacated their homes, are open and grateful to engage in negotiation if the renter has a good rental and credit history.
This highlights one of the most Value Added Services that a good real estate agent can provide. While mortgage companies are tightening standards which would have enabled many prospective buyers to purchase homes a scant 6 months ago, real estate agents can facilitate solutions which enable both the home owner and home buyer to accomplish their goals in a reasonable manner.
When submitting offers for lease to purchase options, a prospective clients full credit report is checked and made available to the prospective landlord. In addition, we facilitate the completion of the lease documents and arrange for the closing to be held in a title escrow office which ensures proper accounting for earnest money deposits and any other agreements which are in place.
We have found that this Value Added Service is truly appreciated by home owners because it protects their interests through a careful review of the prospective tenant. It is also greatly appreciated by home buyers who can take the first steps towards home ownership and in some cases even begin to build home equity through their rental payments.
If you're interested in knowing more about how to obtain some relief while you try to sell your home or want to explore purchasing your home through a lease with option to purchase, please contact our office for a FREE, Value Added, No Obligation review of your specific situation. We specialize in creating WIN WIN scenarios.
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Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.
Rentals are a true alternative until the inventory gets back down to reasonable number. I know I would rather have a renter and have some money coming in than to have a house sit vacant.
Sean Allen
I'd rather have my house rented than vacant. Renting is a viable option for sellers and we, as agents need to educate them of the opportunity.
I have a condo project listed with 24 units for sale. Just today, we sat down and re-strategized our marketing plan. I'm going to post the information tomorrow. They seller has decided they'll rent any unit a buyer or tenant would rather rent. And they're offering commissions on the lease agreement, to the agent who brings the tenant.
Unfortunately, our market is over-saturated with rentals, the same as with the listings for sale. And our MLS does not allow rentals to be entered into it. So we're going to have to get really creative about marketing!
Lola~
From the perspective of "relief" I can feel the stresses melting away...I guess it depends on how many rentals are on the market....beyond that...just knowing that there are alternatives may keep some of our clients in problem-solving mode ...and that's a way better place to be than feeling really discouraged...thanks for the tips!
Hi Lola,
You make some good points on this post. In CA our inventory is about 4X what it was a few years ago. Although it's off that we still have a stong demand for quality rentals.
I was happy to see your post on this very situation that is occuring all around us.
Hi Lola,
Great post, as ususal.
I've worked with a couple sellers over the last couple years to do the short term rental. It's helped to stop the bleeding a bit, and of course in most cases, an occupied home shows better than vacant.
The other reson I've found this to be helpful is that some insurance companies have clauses that deny coverage if a home is vacant for an extended period of time. With the large number of vacant homes, I often wonder if the agent or owner have checked with their insurance person to make sure that if there is a catastrophic loss, that there would be coverage.
See you at your 2nd big blog class!
Eric
Hi Eric, Your comment about the insurance issue is very pertinent. I had a client who faced this "crisis" when he was told that his vacant home might cost thousands more to insure. Fortunately, we were able to find a provider who did not require this kind of an up-charge. I'm sure that many homeowners and agents do NOT factor this unpleasant fact into their calculations. Thanks for this Value Added Insight to the discussion on this post.
Hi Lola..... It's great that you post on this topic... I think it's a great idea for sellers to consider renting until their home sells....
I also love the picture on your post
Lola, we used to have a rental classification in our Lancaster County, PA MLS. It hasn't been there for 10 or 15 years because it wasn't popular enough to keep the classification going. With today's market, I wish they'd bring it back.
Rentals or lease options can be good alternatives to an empty house.
Hi Brian, That's interesting...you'd think that with market conditions the way they are in many parts of the country, this is an option that MLS systems would want to provide to their memers.
Hi Ed, vacant houses are liabilities in a number of different ways which include higher costs for insurance, having to maintain a mortgage payment and not being able to move on with one's life. Thanks for stopping by to read and comment.
Hi Lola,
Great post. While renting may not be a sellers' first choice, it at least provides some income and a little security while waiting for the home to sell. And for those agents that are unfamiliar or uncomfortable with rentals, there are virtual assistants, including myself, with experience in property management that can help agents screen tenants, research local rental laws, and set up lease documents. Providing this service is definitely a Value Added Service agents can offer their listings. Thanks for the post.