What are the Alternatives?
The alternatives are rent, short sale or foreclosure. Here's how it looks from a Seller's or Buyer's perspective:
What are the Alternatives?The alternatives are rent, short sale or foreclosure. Here's how it looks from a Seller's or Buyer's perspective: For the SellerThe Seller's primary alternative is to lease the property. A landlord must deal with the 3 M's - Maintenance, Management and Move-outs. With a Contract for Deed, the Buyer is responsible for all maintenance - no more 3AM calls about the toilet running. There is no need to pay a management company to coordinate payments, look for a new tenant every year and collect rent. A Contract for Deed Buyer has an ownership mentality and a down payment so he is less likely to move out and leave you hanging.For the BuyerIf the Buyer can't find a new loan, he can rent or rent with an option to buy. But, renters lose many valuable benefits associated with ownership. A renter gets no tax deduction for his monthly payment. That tax deduction can return a third of the monthly payment in the form of tax savings. A renter gets none of the property's future increase in value. A renter does not get the benefit of amortization - that part of every monthly payment that reduces the principal loan balance and increases equity in the property. A renter is subject to rent-increases at every renewal whereas a buyer will usually have a fixed payment. And finally, a renter has no assurance he will be able to stay. The owner might decide to sell rather than renew the lease. |