Beyond the Headlines

Beyond the Headlines6.7

Leases With an Option to Buy

Basics of a Lease Option: *  Buyer pays the seller option money for the right to later purchase the property.  The lease option money is negotiable.  *  Buyer and seller may agree to a purchase price now or the buyer may agree to pay market value at the time the option is exercised.  It is negotiable, however, most buyers want to lock in the future purchase price upon inception of the lease option. *  During the term of the lease option, the buyer agrees to lease the property from the seller for a predetermined rental amount. *  The term of the lease option agreement is negotiable, but the common length is generally from one to three years. *  The option money generally does not apply toward the down payment. *  A portion of the monthly rental payment typically is applied toward the purchase price. *  Option money is rarely refundable. *  No one else can buy the property during the lease option period. *  The buyer generally cannot assign the lease option to another person without seller approval. *  If the buyer does not exercise the lease option and purchase the property at the end of the lease option, the option expires. *  The buyer is not obligated to buy the property.   Lease Option benefits for the seller:   *  They often get to sell the house at a higher price than they could sell the home in a normal transaction. *  They can sell the house during a slow market. *  By being able to collect a larger monthly payment than they could obtain in a normal lease, the property "cash-flows" and they don't have to come up with money out of their own pocket each month to make the mortgage payment. *  They receive up-front option money and when the buyer cannot exercise the option, the seller is allowed to retain the funds.

Just Listed in Irvine!

2 Bedroom 

2 Bath

Mid-Rise Condo in Avenue One

1,037 sqft 

Eastern facing view of greenbelt!

Please call or email to discuss further or schedule an appointment to see.

Rates at Lowest Level this Year

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.93 percent with an average 0.7 point for the week ending May 13, 2010, down from last week when it averaged 5.00 percent. Last year at this time, the 30-year FRM averaged 4.86 percent. The 30-year FRM has not been lower since the week ending December 10, 2009, when it averaged 4.81 percent.

The 15-year FRM this week averaged 4.30 percent with an average 0.6 point, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 4.52 percent. The 15-year FRM has not been lower since the week ending December 3, 2009 when it averaged 4.27 percent.

Full Article:

http://www.freddiemac.com/pmms/release.html?week=19&year=2010&display=release

C.A.R. Fast Market Facts

CA Median Home Price Quick Facts:

.  Existing, single-family home sales increased 2.5 percent in March to a seasonally adjusted rate of
   516,590 units on an annualized basis compared with March 2009.

.  The statewide median price of an existing single-family home increased 20.8 percent in March to
   $301,790, compared with March 2009.

.  C.A.R.’s Unsold Inventory Index fell to 5 months in March, compared with 5.6 months in March 2009.

2009 4th Quarter Affordability Quick Facts:

.  C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the fourth quarter of 2009
   compared with 61 percent (revised) in the fourth quarter of 2008

.  The median price of an entry-level home in California was $257,940 in the fourth quarter of 2009

.  The estimated monthly payment including taxes and insurance was $1,470 in the fourth quarter of
   2009

.  The minimum household income needed to purchase an entry-level home in California in the fourth
   quarter of 2009 was $44,100.

Source: CALIFORNIA ASSOCIATION OF REALTORS^®