- The Washington Times - Wednesday, January 17, 2007

Serious markets require serious means of moving real estate. It often takes more than just a beautiful home and a good price to sell a house these days.

For cross-state or interstate sellers who are facing a mandatory move, renting out the house is one of the options available to lessen the sting of making two payments.

There are a few nuances with this option, as well.

• Rent with power. Don’t just offer the house for rent, but open it up to be rented furnished or rented short-term. If you’re in a destination city such as New York, Washington or Los Angeles, where tourists are looking for one and two-week rentals for vacation, consider renting for leisure.

Corporate rentals are an option. Companies need a short-term or long-term furnished rentals for executives and their families.

Keep in mind that you’re looking to cover your mortgage. If you bought high, one way to receive above-market rent is to offer the house and furniture.

Short-term leases — leases for less than 12 months — also customarily are higher than those with tenants who are willing to stay a year or more.

A good relocation and corporate housing agent should be able to help you determine a rental price for your single-family, fully furnished home. A fully furnished, short-term home can bring in several hundred dollars more per month than the going rental rates.

• Rent to sell. This option can come with some headaches if you’re not careful.

Renting with an option has been a model of home selling used by investors who have worked with credit-challenged buyers.

This style of sale is a combination of a rental lease and an option-to-buy sales contract. The buyer pays a small down payment and then pays an above-market rent. The money above the market rate is usually applied to the tenant-buyer’s down-payment funds, which are used as a credit at settlement that occurs in the future, if at all.

The price can be determined at the time of the contract signing or the tenant/buyer could negotiate to pay a future amount, which can be a bonus or a bomb depending on where the market goes in the future.

There is yet another option that doesn’t involve being a landlord.

• Carry a bridge loan. If the seller can carry two mortgages, he may want to consider a bridge loanthat includes an option adjustable rate mortgage (ARM) scenario.

The option ARM can provide a buyer with a really low monthly payment for a short period of time. However, paying the least monthly amount on the option ARM will not cover the interest that is owed. In essence, the borrower’s loan amount keeps growing if he never pays more than the minimum.

In addition, at some point, the loan amount is amortized over a shorter period than the usual 30 years. The monthly payment could escalate by hundreds or thousands of dollars per month.

The benefit is that it gives an owner the ability to carry an extraordinarily high mortgage amount while he’s waiting for the first house to sell. The borrower can then move into his new house of choice while his former home is still on the market.

Seek out a reputable loan officer to help you with this style of financing and read the fine print for any terms you just cannot accept, such as an early pay-off penalty.

Be careful with this program and be sure to aggressively price the home you are trying to sell so it will sell quickly.

In a slow market, your best defense is, of course, pricing your house to sell. However, selling in tougher times may require even more aggressive action, such as creative financing and dealing.

M. Anthony Carr has written about real estate since 1989. He is the author of “Real Estate Investing Made Simple” and contributing author to Donald Trump’s “The Best Real Estate Advice I Ever Received.” Post questions and comments at his Web log (https://commonsenserealestate.blogspot.com).

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