Tenants Beware- Are You About to Rent a Foreclosed Home? Did You Think to Check?

Nobody seems to do any kind of checks on the Landlord- and they should. If you are looking to rent a home, you already now that the Landlord will want a recent credit report and references. Have you thought about making sure that your prospective landlord actually owns the property? and that he/she has the right to rent the property?

Even if the property is listed in the MLS, it does not necessarily mean that the listing agent has performed due diligence to make sure that the person that shows them the property and purports themselves to be the owner  is in fact the said owner of the property, or has the legal right to rent it.

Recently, on the news was the case of  a rental scam artist, who took advantage of the flood of neglected, empty houses on the real estate market caused by the huge increase in recession-driven foreclosures, and was able to show the property as his own, obtain a security deposit and first months rent, and NEVER delivered the property as promised. He couldn't. He did not own it.  Those would-be tenants lost their money.

How does this happen? Homes owned by banks and other financial institutions may take months, or even years to sell, leaving them unchecked for the duration and sitting targets for the scammers. Don't think that it will not happen in your area. Others have thought the same thing. Don't fall victim to traps.

In another case, an individual lived in, and paid rent on a house for over a year before finding out that he was unwitting and unwilling participant in  a rental scam and that the "landlord" didn't actually  own the house.

and don't forget

... no matter how nice the property appears, and how well kept is seems to be, is it possible that the home is considered a distressed property?  A distressed property  means that the home is under some stage of the foreclosure process. Would you want to rent a home that was in imminent danger of being foreclosed?

Don't be fooled or scammed. Do your homework and hire an experienced agent  who knows to check these things, and  just as important-  knows how. - and I just happen to know someone.:)

Contact  me today and I will help you find your next home.

If you are out of our service area, we offer a FREE referral service to a top agent in your neighborhood, or anywhere in the country. Click here for more info

Buying, Selling or Renting a Home in Fairfield County?  We'd love to represent you.

If you are in the area, or would like to be, feel free to email us here or visit our main  site at

www.CThomesAndRealEstate.com

If you have a question about buying, renting or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

AND.... If you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Tips for CT Landlords: Should You Allow Pets in Your Rental Property?

The seemingly perfect tenant comes along after a string of prospects with poor credit, and they have a pet. If your property has been vacant for longer than you would like, it can be a tough decision. So what do you do?

If you are a new Landlord and this is your first tenant or one of your first tenants, you may want to consider dropping by their current residence to see how clean it is, and if there is any pet damage. Do this unannounced, but let them know when you interview them that you may want to stop by their home, before you make a decision

If you have had prior bad experiences with tenants that have had  pets,  it may not matter. If you are open to the idea, but somewhat skeptical (as you should be) take these items into consideration.

 First and foremost, you cannot charge additional security for rent because of a pet. The maximum you can collect at the beginning of the lease per Connecticut state law is two months security and one month's rent . If your prospective tenant happens to be 62 or older, you can only collect one months rent and one months security upon lease signing.  No ifs, ands, or buts.

You CAN charge additional "pet" rent. You might consider adding up to an extra 10%  on the monthly rent. Be careful if you do that, though. When you advertise your property, or your agent advertises it, make sure you note that pets may be considered.

The amount of extra rent you charge is up to you if you want to go this route. No one says you have to.
If you have any questions about renting your property, or are in need of representation, please contact me. I would be happy to assist you.

Bad Credit Report from Prospective Tenants? Landlords Take Note

Here is the first in our new real estate law series "Tip of the Week" that you can look forward to every Wednesday. The Tip of the Week is brought to you by OnlyClosings.com

Did you know… If a landlord denies an application or requires a co-signer based on information obtained from a consumer credit report, the landlord must follow the rules of The Fair Credit Reporting Act (FCRA) and provide an “adverse action notice.”

This notice must include:
- the name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide;
- a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and
- a notice of the individual's right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer's right to a free report from the CRA upon request within 60 days.

To read the article by the Federal Trade Commission “Using Consumer Reports:  What Landlords Need to Know.” click here.

The weekly Tip-of-the-Week* is supplied by Only Closings --

a law firm devoted to real estate closings.

      - Our closing staff is made up of seasoned, experienced real estate attorneys.
      - Close where it is most convenient for the client (home, office, job or bank)
      - Very competitive closing fee and no hidden fees!
      - No fee consultations.
      - Personalized, responsive service from all of our attorneys and paralegals

To learn more about Only Closings and how they can help you quickly close a property transaction, call them at 203-563-9677 or visit them online at www.OnlyClosings.com

*The content within the "Tip-of-the-Week" is strictly for informational purposes and not intended to be interpreted and/or used as legal advice. Only Closings and OnlyClosings.com is a service provided by Tamara L. Peterson Attorney at Law LLC.

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How much of a downpayment do you need in order to buy a home in CT?

You may have heard that you need a 20 percent downpayment, a 10 percent deposit,  five percent down, or even less to buy a home. It really all depends on a  number of factors besides your credit-  including your income, your liquidity (or cash on hand), your debt ratio, and what price range that you are looking in.

Years ago, the accepted standard for a downpayment was 20 percent. Prices were also much lower then, and that twenty percent downpayment was a lot easier to attain. We call that percentage a  conventional downpayment nowadays.  At some point a ten percent deposit was acceptable, as long as you paid the bank Private Mortgage Insurance (PMI).  PMI is essentially insurance to cover the bank  in case of a default. When you reach 20% equity and can prove it, you can usually get the PMI removed. For you professionals out there, yes- I am simplifying it for the masses. If and when you have a question about PMI, it's best to contact your mortgage broker or the bank that holds your loan for their policies.

Around twenty or so years ago,  five percent down became an acceptable downpayment, and much more common than one might think. It has been  fairly common ever since. You can also get a government backed loan with as little as 3.5 percent downpayment (FHA). The PMI is necessary for these loans as well, although some loan providers also allow you to opt to pay a one time PMI  fee, instead of monthly, or a combination of the two.

Now that we have the percentages down, you also have to qualify for the loan amount that you are looking for.  Of course, I can give you an estimate, but it really is best to meet  with a mortgage broker  who can guide you in the right direction with the loan amount and type of loan that's best for you. We  post current financing rates here every Friday  and you can check our blog for rates, and you may wish to Contact a Mortgage Broker to get clarity on your particular situation. We happen to like Jennifer Buchanan, among others. See her contact info at the bottom of Every Friday's Financing Update.

If you really think about it, and you were thinking about just renting a home, you may want to consider buying.  In order to rent anywhere, you generally need three months rent to move in. (That's one months rent, and two months security) That number is usually very close, and in some instances MORE than a 3.5 percent deposit. We can always negotiate closing costs, so you may very well be able to buy when you only thought you could rent. Give it some thought.

The rates are historically low, and prices are very good right now. You would be getting in on the ground floor!

If you are thinking about buying and want to browse the MLS, you can do so with unlimited access right here on our site, or if you are ready to look right now, we can get started right away. We 'll get you the best deal whenever you're ready.

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Communication is Key when Selling a Tenant Occupied Property

For Landlords: Selling your home when a tenant is occupying the premises.

In the last several years, many homeowners who were unsuccessful in selling their home at their desired asking price, opted to rent their home.  This was a new arena for many.    Being a landlord is not for the weak at heart.  There is a good amount of work involved but in many instances it can be a profitable venture and also there can be some substantial tax advantages when the property is eventually sold.  The property can be depreciated, but be careful there are certain holding periods and one should always speak to their accountant to make sure the timing is correct to reap the tax advantages.

When the time comes that the property owner lists the home on the real estate market, there must be good communication between the Homeowner and the Tenant regarding the Tenant vacating the premises.  If the Buyer of the property is looking for an investment property, having a property with a rock solid rental history is key.  However, if the Buyer is purchasing the home as his or her’s primary residence, the property must be vacated before the closing.  This is when the situation gets tricky.  The Seller wants to maximize on the rental income and does not want the property vacated until the Buyer has his/her mortgage commitment but that usually occurs days before the actually closing.  The Seller/Landlord must give notice as required by the lease and if there is no lease than a minimum of 30 days.    The last thing anyone wants to get involved with is an eviction proceeding.    Communication is key between the Seller and the Tenant.

Attorney Felicia B. Watson

FeliciaWatson@sbcglobal.net