Are you trying to sell your house in a buyer's market? A lease option may be the perfect solution to ensure you get top dollar for your home and maybe even generate some extra income off the sale. Lease options, in which you lease (rent) your property to a potential buyer who has the option to buy the property at the end of the lease term, can allow you to tap into a huge pool of people who want to buy a home but who, for one reason or another, aren't quite ready to make the purchase yet.

== Steps ==

- Decide if a lease option is a good option for you. A lease option isn't for everybody. If you need all the money from the sale of your home right away, you're better off with a straight sale.

- Place an ad in the paper or online.

- Do a background check on applicants. You don't want to do a lease option with somebody who you wouldn't rent to.

- Pre-qualify your lessee. It's a good idea to contact a loan officer or mortgage broker to at least discuss the potential buyer's prospects for obtaining a mortgage at the end of the lease term.

- Provide the potential buyer with a seller's disclosure form listing any known problems with the house.

- Negotiate a contract. You can get fill-in-the-blank lease option forms online, but you're better off getting them from a local real estate agent or attorney.

- Agree on the purchase price of the home, which should be fixed on the lease contract.

- Determine how much option money to collect. A typical figure is 2-4% of the purchase price. You will keep this money no matter what. If the lessee decides to buy, the money will be credited toward the down payment or the purchase price, and if the lessee doesn't buy, he or she forfeits the option money to you.

- Decide how much of the lessee's monthly payment will be credited toward the option.

- Decide on the term of the lease. Lease options typically run anywhere from 6-24 months.

- Get the right insurance coverage. Since you will no longer be the owner-occupant of the house, you may need to update your homeowners insurance policy to a dwelling policy.

- Collect monthly payments. Keep track of the payments received so you'll have a record when the time comes for the lessee to exercise the option (or, in the the worst-case scenario, when you have to go to court to settle a dispute).

- Sell the house. At the end of the term the lessee can exercise the option to buy the house for the price specified on or before the date specified. The total option money paid (including the initial option money plus any credit from the monthly payments) will go toward the down payment. Thus, the buyer already has equity in the home and should find it easier to get a loan.

SOURCiS / SacMetroRealEstate.com is offering IDX (Internet Data Exchange) solutions to Brokers and agents in Sacramento Area (MetroList ®) and San Jose Area (MLSListings.com).

IDX, also known as Broker Reciprocity, is a system where brokers give permission to display their listings on each other's web sites. SOURCiS provides a set of web pages on a web site that provides access to these listings.

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Contact SOURCiS for more information.


MetroList ® MLS covers Central Valley, El Dorado County, Lodi, Merced County, Placer County, Sacramento, and Yolo County.


MLSListings.com MLS covers Alameda County, Monterey County, San Benito County, San Francisco County, San Mateo County, Santa Clara County, and Santa Cruz County.

Mortgages are still available, despite talk of a credit crunch.

Qualified borrowers can find conforming and FHA-insured mortgages easily. Jumbo mortgages are more scarce, but available. Rates went up in the last week, which is another way of saying that credit is tighter. But the mortgage marketplace isn't frozen, at least in part because of federal intervention.

"There's almost no difference in the availability of money compared to a year ago, with the exception of jumbos," says Jim Sahnger, mortgage consultant with Palm Beach Financial Network in Stuart, Fla. "The main difference is that you have to provide documentation, such as W-2s, tax returns and bank statements. Welcome to the full-doc world."

Credit standards have been getting tighter all year, reducing the number of people who qualify for loans. It's hard to quantify how many people have been disqualified merely because of more strict lending standards.

As Sahnger mentioned, one prominent change has to do with documentation of income. A year or two ago, a borrower with an excellent credit history and no change in employment might have been able to refinance a mortgage without having to provide proof of income -- even on a full-documentation loan. Those days are gone, mortgage lenders say. Bring in W-2 forms or income tax statements, or get turned down for a loan.

By Holden Lewis - Bankrate.com

These tips and suggestions can help you make the best possible impression on the lender of your choice.

The four C's

• Capacity, which refers to the adequacy of the borrower's income to pay the interest and principal due on the loan, plus property taxes and homeowners insurance.

• Character, which refers to the borrower's track record of paying debts as evidenced by his or her credit history and credit score.

• Capital, which refers to the borrower's down payment (or equity) as a percentage of the current value of the home.

• Collateral, which refers to the safety and soundness of the home and the value of the home as determined by an appraisal relative to the agreed-upon purchase price.

By Marcie Geffner • Bankrate.com

Judy Carter leading REO (Real Estate Owned) specialist in Sacramento area just launched Sacramento Area REO Bank-Owned Listings - ForeclosuresRealEstateAgent.com. Viewers have direct access to Sacramento County, Placer County and El Dorado County bank-owned properties. They can search and view from a large inventory of foreclosed bank-owned properties. REO listings contain detailed information about the property. Placer County foreclosures are listed in reosplacercounty.com and Sacramento County foreclosures are listed in reossacramentocounty.com.

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