Well, I have to say, for a lot of people right now, renting seems like a great option. There are plenty of homes from which to choose, and it certainly seems to be cheaper than purchasing in many cases. Here’s a great resource from the Business Week Housing Blog to help you make the right choice. read
But be careful who you rent from, or you may end up unexpectedly evicted when the bank takes back the home. Checking the notice of default list and assessor records to make sure there’s equity in the home is probably a prudent move for renters these days, prior to committing to a lease. read
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22 comments
Let’see. You are some poor ignorant schmuck who cannot afford to buy your own home. Now you are expected to check out “notice of default list and assessor records” before renting a home from a third party.
Give me a break. If that is what it takes these days, then I will recommend to every renter I know that they rent from a large rental complex. At least they know if the complex goes belly up, they will not be quickly be kicked out.
SJ
Exactly how fast can someone be kicked out if they are renting and the homeowner’s home goes into default or forclosure? I thought there were rules such as 30 days notice that areworked into leases? You would think a renter would have some rights for breach of contract, regardless of whether the owner can pay his mortgage or not, and that the banks who repo the homes would have to honor those contracts for at least 30 days as per the rental agreement usually states? If not, then laws/ordinances need to be passed stating that. I think renters in that situation should have at least 60 days to relocate…it’s not like the home is going to resell that fast anyway.
Well I sold my house in October 2005, because it made no sense to own when I could rent for so cheap. So these investors bought my house. I just stayed in the house and rented it back from them. They have now defaulted on the mortgage. It is a short sale and they have 60 days to sell it or it goes into foreclosure. My understanding is if it goes into foreclosure, I will just pay the rent to the bank. Anyway, the house has dropped 27% in value in two years flat. It’s easy enough to find a new place to rent, plenty out there. Don’t want to buy yet, houses still have more to fall.
Once the bank takes back the house, you will basically be a squatter. Your rental agreement was with a party that no longer holds title to the property, so you’re SOL, and can be evicted as soon as the Sheriff can get there. Continuing to pay the new owner (bank) will not give you a right to remain there, unless you enter into a new, binding agreement with them. And the banks hate to be RE owners, not to mention landlords. It might be smart to let the tenant stay on during the REO resale process, but that’s not how the system is set up.
Who ever thought it would come to the renter requiring a credit report from the landlord, and not vice versa?
The whole system got entirely out of whack in this bubble. Mortgage owners could go and buy a house with nothing down, and borrow up to 10X actual income with a Voodoo Special liar loan. A lousy FICO meant nothing.
Renters had to come up with first/last/ cleaning deposit and have a good FICO.
So to rent a $1300 month house, a renter had to come up with about $3,500 in cash and be crditworthy. To buy the same house, a debtowner had to come up with squat, could take on a payment equal to 60% of his (real) take home income, and his uncreditworthiness meant nothing.
Welcome to just one more aspect of the “New Paradigm” where one could never lose money on a house, where property values rise forever into the sunset, and where lying speculators are regarded as reputable homeowners, but renters, unwilling to commit felonies, are called “ignorant schmucks.”
It’s going to take years to move out of this Orwellian creation and restore sanity to the market.
RE: “borrow up to 10X actual income with a Voodoo Special liar loan.”
10x? … no, 50x!
Remember the strawberry picker with $15K in total annual gross income and a $720K stated income loan?
What a country!
“Remember the strawberry picker with $15K in total annual gross income and a $720K stated income loan?
What a country!”
Yep. I remember him. If I recall correctly, he’s an illegal alien, so he’ll just leave his mess for the US and laugh his way back to Mexico, with tales of absurdity.
Here’s another one from the LA Times:
“Soledad Aviles dreamed for years of owning a home…So he felt blessed last year when he learned he could buy a three-bedroom, single-story stucco house…He borrowed the entire purchase price of $615,000 from Washington Mutual at a high interest rate typical of sub-prime loans. The monthly payment, as he says he understood it, would be $3,600 — steep for a glass cutter who made $9 an hour…He was shocked to learn afterward that the monthly payment would not be $3,600, but $4,800.
Here’s the link:
http://www.latimes.com/wireless/avantgo/la-me-housing8oct08,0,3327659.story
Well if you’re really concerned, might I make a couple of suggestions?
1. In your rental agreement, include a covenant where the landlord warrants and represents that during the term of your tenancy agreement he will keep current all senior liens, encumbrances and obligations. This way if you receive notice he/she hasn’t, you have remedies available to you.
2. If you’re worried about what happens to your deposit, why not share your concerns with your landlord to be? Ask him/her how he/she can guaranty your deposit will be there for you at the end of your tenancy?
One way to address your concern might be to place the money into a separate escrow depository [rather than your landlord’s pocket]. To convince your landlord to go along with this proposal, why not suggest the depository be interest bearing and he be the one who gets to keep the interest?
If you’re really concerned, you can record something called a request for notice of default under senior encumbrances. That way if your landlord defaults to one or more of his/her lenders, you get actual notice at the earliest possible moment.
Now if you are renting on a month-to-month basis, none of this matters much to you because any foreclosing mortgagee [or purchaser at foreclosure sale] has to give you 30 days notice [60 days in California if you’ve been in possesssion for a year or more]. The reason I say it doesn’t make much of a difference is because even if there were no foreclosure, your landlord could still terminate your right to possession with the same 30 days notice.
If I were a renter [which I am] and received a notice of a default or sale pinned to my front door, I would not be making further payments to my landlord until he/she convinced me that I wouldn’t be disposessed by a mortgagee or purchaser at foreclosure sale some 90-120 days down the road. If he/she weren’t able to convince me [and really, why wouldn’t he/she be able to convince me if he/she were for real?], I would rely upon my deposits for future rent.
Might this trigger an unlawful detainer lawsuit? Perhaps. But I think your landlord would lose because he’s/she’s already anticipatorily breached your rental agreement [your remaining term is in jeopardy] which legally excuses you from performance.
But if your landlord is in default, and the sheriff comes at you with a move out order, who are you going to collect damages from? Seems like you would have a better chance of getting blood out of a turnip…
As I look at Diane’s new listings for Montreux properties I can’t help but wonder who would be foolish enough to pay $2.5 million for a house in Reno, NV. Not many, I would guess. There are precious few properties which are actually worth that. None of these homes qualify. I wonder how long these builder/speculators can continue to burn cash. There is always a point in which it start to hurt badly.
I recently read an article which talked about the rapidly cooling market for fine art. It seems that the real estate bust is taking a toll in that arena as well. It just goes to show that the pain will be felt everywhere. Nobody will be immune. Sure, if you’re extraordinarily wealthy, you don’t have to worry about putting food on the table, or gas in the Ferrari. But, it still bruises the ego when you lose $10m on the painting you recently purchased.
I remember all too well in 1984 renting a home for my 3 kids and myself, working full time, going to school full time and Thanksgiving having a sheriff show up with eviction papers. Apparently we had been renting a home that the owner no longer owned. When we went to court the bank took pitty on us, helped me find a good rental, helped us move and even brought the Christmas tree… I am sure not everyone in this position has a good memory of such a bad deal.
Redarding Diane’s two new listings in Montreux referenced above, 5895 Lausanne and 6031 Lake Geneva Drive, both spec homes built by Zahler Custom homes, does anyone know the ballpark cost per sq. foot to build homes with these specs in Reno? I am curious what margin builders are attempting to make these days since many builders in other markets are selling at cost. I don’t think these two homes are listed for anywhere near cost. Their pricese seem seriously inflated compared to similar homes in the Galena area, and the land in Montreux should not have much to do with it.
http://biz.yahoo.com/ap/071016/paulson_housing.html
BB, five people this year have paid over $2.5 million for homes in Reno, two in Montreux.
John, Lake Geneva is not my listing, but 5895 and 5905 Lausanne are, and you are correct, they were both built by Zahler Custom Homes. I do not know what they cost to build.
I do not know what they cost to build either, but look at the cheapest solid new houses for sale by a developer and add for the upgrades and a possible lot premium. I think that newly built houses can be had in Somersett for under 140 per sqft with some upgrades
Bantering Bear, you suggest that “not many” people in Reno would be foolish enough to pay $2.5 million, or more, for a house here.
0.0016 percent of all the houses sold in Reno as of 9/30/07 sold for $2.5 million or more. (5 out of 3,067).
Certainly a segment of the market that warrants the substantial time and attention of a diligent realtor.
Alright… Getting back to the Rent Vs Buy discussion.
As someone who is in the process of moving back to Reno and will be sitting on the sidelines in a Rental for a while, is there any advice on where to find out decent information on a perspective landlord without paying for a foreclosure site month after month?
I’ve done the zillow check on the house that we’re looking at, and it looks like they bought it in 02 for 315K and it’s now in the 450k ballpark, but it would be nice to know if there is a way to keep tabs on the status of the loan, if that’s even a feasible query???
Any help is more than appreciated!
Miller queried, “is [there] a way [for a tenant] to keep tabs on the status of the [landlord’s] loan?”
As I suggested earlier, record a notice of default [NRS 107.090] as a “person with an interest” under the landlord’s mortgage[s]. You won’t learn of a default until some months after-the-fact, but you’ll learn much quicker than if you had recorded nothing.
BTW, under Nevada law the person with an interest must have his/her interest reflected by a recorded document. So you record a notice of existence of lease against real property.
Good luck!
Diane posted:
“BB, five people this year have paid over $2.5 million for homes in Reno, two in Montreux.”
I don’t doubt that, Diane. But, those homes are going to see their values plummet in the years to come. An ebbing tide lowers all boats, and some of those folks paid twice what they should have. Let’s hope they are extraordinarily wealthy, and don’t have to sell very soon.
As far as the Zahler homes are concerned, I’m willing to bet there is at least $750k in profit baked into each of those price tags, maybe even $1m. I seriously doubt they paid more than $500k per parcel.
Thanks Smarten!
I’ll look into that one. May be a little touchy with a new landlord, but if the market dictates…
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Hi Folks,
I am looking to move from Austin Texas to the Reno area in the next few months and would like to rent houses in and around Reno weekly or monthly while I look for something to Buy. I want to scan the forclosure market and ‘for sale by owners” to try and help someone out of a tough situation and get a good deal in the process. I have 2 dogs, labs 6 years old, clean and very nice that will be travelling with me. I will be travelling light so that I can move around weekly or monthly while I am looking for prospects. I plan to come out sometime and march and stay out there for several months or until I find something. Any of the small towns around Reno would be considered like Carson City or South Lake Tahoe. The house/Office/warehouse should be large, at least 2000 sq ft, with good internet access available and land ample for the dogs to run, preferably with a view. Al arge building or warehouse with living quarters would be ideal.
Eddie
512-529-9889
nycprice@gmail.com