Is Tenant Responsible For Rent On Home Being Foreclsoed On?

This is a question that I have seen coming up more and more recently. I represent a lot of first time buyers and families that have moved here from other areas that are currently renting now. One of the biggest questions I have received lately is they have received notifcation that the home they are renting is going to foreclosure.....are they obligated to pay the rent still; if the landlord stopped paying the mortgage?

This is an easy question to answer. YES. Each of those transactions are independent of one another. The landlord (owner of the home) has a contract with the bank to pay a certain amoutn each month. If he defaults on that the bank can, and will, sue him for breach of his contract and take the home over via foreclosure. However; his mortgage is not tied into you paying the rent each month. there is no clause that says as long as the rent is paid he has to pay the mortgage.

The same goes true for you. You have a signed lease agreement with the landlord (owner) of the property. Just because he has defaulted on his mortgage does not entilte you to not pay the rent. Unless your lease agreement specifically reads that your payment of the rent is subject to the landlord beign current on the mortgage; you have to pay until the day he does not own the house anymore. Just as the bank can sue the landlord for not paying the mortgage; the landlord can sue you for not paying the rent.....

It does NOT matter if he has not paid the mortgage payment. I just had a client who bought a house from me a few months ago that got sued by the landlord for breach of his lease agreement. Eventhough the landlord eventually let the house foreclose on; my client failed to pay the rent when he found out it was being foreclosed on. (for the record I did not advise my cleint of doing that). He lost in court and has to pay the ex-landlord back rent PLUS court fees.

So be careful if, you receive a foreclosure notice at your door because the landlord has not been making the mortgage payments. it does not preclude you from not making the rental payments.... Consult an attorney before yous top making the payments.

Dave diCecco
Realtor/Broker
www.davedicecco.com

Are Appraisals Affecting Your Financing Options

There has been much made recently about foreclosed homes and the conditions of them. People are looking constantly for a better deal and trying to purchase a home for well below market value. But what happens when your mortgage lender orders the appraisal? We all figure that if the house is priced well below market value then they should have no problem getting the house to appraise for more than they are looking to purchase the home.

However; today the appraisers are looking for more than just the value of the home. Certain guidelines with FHA and VA loans have made it more difficult to purchase homes in "as-is' conditions. Which in turn has led banks to sell their homes without those financing avenues availble to consumers.

Recently I had 2 cases where the appraiser placed the value of the home at or slightly greater than the agreed upon price. However; in both cases the apprasier stipulated repairs to be done to the house prior to them being able to clear the appraisal for the type of financing that was requested.

In some cases it can be minor repairs. In other cases the repairs can be quite costly. So, who pays for the repairs? Is it something that the seller can afford to repair or is the buyer going to have to pay to have the repairs done to the house? these are questions that need to be asked if you are purchasing a home in an "as-is" condition. It can make the difference between you being able to purchase the house and not being able to buy the house.

Make sure if you are purchasing a home in "as-is' condition that the home will qualify under the type of financing arrangemetns you are looking to get....otherwise you could be going through the process and making the arrangements for the move that may not happen on that home.....

Dave diCecco
Realtor/Broker
www.davedicecco.com

Why Are More People Choosing North Carolina To Live

The other day I was reading an article from Forbes magazine. It was discussing the top ten states people are leaving and the top ten states that people are moving to. People are leaving states in the North and Midwest and fleeing to states in the South and Southwest.

North Carolina ranks in the top five of states more people are fleeing to. Why? There is a wide array of reasons. On the top of the list is economy. Despite all the horror stories people read on a daily basis on the economy and jobs; North Carolina ranks among the top destinations for young professionals. It has a high growth rate in energy jobs and high tech and is home to some of the largest public companies. This makes it an attractive place for young professionals looking to start a career or professionals looking for a job.

Another reason is the weather. The southern states have always been enticing to people moving because of the lack of snow and extreme cold weather that is characteristic of the north this time of the year. One has to only look at the news to see that winter has already struck fear in some people and caused havoc for a lot of people in the North and Midwest.

Third is the cost of living. In comparison to some states North Carolina offers an affordable cost of living in comparison to where they are at now. Personally moving here from the Northeast five and half years ago; I can contest to that. The housing prices are more affordable for approximately the same home; taxes are less expensive and the quality of life is better.

Couple all this together and you have a great recipe for success. Which is why North Carolina has consistently ranked in the top five for people looking to move....

Dave diCecco
Realtor/Broker
www.davedicecco.com