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5 Common Landlord-Tenant Issues and Solutions

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Being a landlord is not easy, especially when you have bad tenants. Here are common landlord tenant problems and possible solutions.

1. Late or No Rent Payment

The most common issue with bad tenants is their inability to or refusal to pay the rent.

SOLUTION

If your tenants often pay late, discover if they are having financial problems. You could set up a temporary payment plan for them and prorate late fees.

If your tenants refuse to pay at all, you can send them a pay or quit notice. It outlines how much is owed plus late fees and when they must pay. If they ignore this, you can pay them to move out. It is a less satisfying option, but your goal then is to find a new paying renter as soon as possible.

If worse comes to worst, you can evict non-paying tenants. This requires lengthy court proceedings and money out of your own pocket though. If the court sides with you, law enforcement will remove the bad tenants by force.

2. Noisy Tenants

Sometimes your tenants are noisy, and they disturb their neighbors. These neighbors then complain to you or maybe call law enforcement.

SOLUTION

It is a tricky situation, but the best you can do is talk to your tenants about the noise.

You might include a clause in your agreement that says what happens if a tenant disturbs the peace. It does not have to be a solution your tenant likes. It can be a penalty fee or so many strikes, and they must leave. Discuss your options with an eviction attorney.

3. Damages (Intentional or Otherwise)

There is nothing more frustrating than a tenant who is destructive to the property. They neglect maintenance, break appliances, stain carpets, put holes in the walls, and leave trash lying everywhere. Sometimes they do it out of spite because you spoke with them on another issue. Other times, they are just dirty tenants.

SOLUTION

To minimize damages, you can have in your agreement that you will perform monthly visits to inspect the property. If there are damages, tenants must pay a fine, and if this bad behavior persists, you will evict them.

4. Rule Violations

Your lease agreement should list tenant rules and requirements. These include restrictions on pets, subletting, noise, etc. If a tenant breaks the rules, the agreement will also outline the forthcoming penalties.

SOLUTION

Most times you can fine bad behavior. Other times, if the tenant does not give you too much trouble, you might adjust a rule in exchange for compensation. For example, if you do not allow pets, but the tenant gets a dog, you can amend the lease to require a pet deposit. That extra money will cover any damages caused by the animal.

5. Tenant Files for Bankruptcy

Most times, when a tenant files for bankruptcy, the court grants them an automatic stay. You cannot evict them and may lose money on unpaid rent till the case is settled. The tenant has 60 days (or more) to decide if they will assume or reject their lease.

This situation is a massive headache, and there is little you can do but file a Stay Relief Motion and wait for the court and tenant decisions.

SOLUTION

Sometimes you need a fresh start. You can sell your problem property and use the money to buy a nice rental property in a better location. However, selling by way of a traditional listing takes time. You often have to evict the bad tenants, make repairs and perform maintenance. It gets costly! Consider instead selling to an investor.

Most investors pay cash for a rental property “AS-IS”. They will buy it with its damages and its bad tenants still living there. Most are also open to seller financing, and you gain interest over time. You do not have to do anything but choose the closing date, which can be in 7 days or less.

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How to Sell Your House After a Natural Disaster

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Selling a house is difficult enough without damage from a storm, hurricane, flood, or fire. Most homebuyers are dissuaded by the house’s poor state and insist on repairs, or you likely have to sell to a flipping investor.
Follow these steps to sell your house after a natural disaster.

  • Sell “As Is” or Restore

Ask yourself if you really want to make repairs to the property. Doing so improves your chances of making a sale. However, the restoration process will be expensive. If you sell the house “As-Is,” you are guaranteed to earn less money. Buyers will insist on a lower purchase price for a property they have to pay to fix up themselves.

  • File an Insurance Claim

File a homeowners insurance claim with your insurance company. Find out what is covered under your policy and how much damage it covers. Photograph and inventory damages, and keep a record of estimated repair costs. Once you file your claim, you will have a better idea of what your insurance will pay out and decide if it is worth restoring the property.

  • Decide How Much to Fix

The bottom line, you need to make the house safe. If damages force you to live someplace else temporarily, renovations are necessary. Avoid drastic changes because buyers may not share your taste in remodeling. Your repairs must make the home livable and might go so far as to increase its value.

  • Make Repairs

Depending on how extensive the damages are, repairs can take several months. This delays you in listing the home on the market. During that time, you may lose prospective buyers or miss out on a trending time to sell.

  • Determine Area Value

Consider this: if you live in a high-risk area for flooding or fires, does your property value dip? Buyers lose enthusiasm for a property if it is in a hot spot for natural disasters. Even if you restore the house state, be prepared to negotiate with buyers over lowering the price.

  • Prevent Damage from Future Disasters

If the property is in an area prone to disaster, prevent future losses and damage, if possible. For example, if you make repairs after a big freeze, but are still in the height of winter, take precautions. These include the addition of extra insulation, cleaning gutters, and guarding water pipes. It would be unfortunate to invest in repairs after one disaster, to then pay new repairs after a second calamity.

Skips These Steps

If you would like to sell your house “as is,” consider selling it to an investor. Most investors will make a cash offer regardless of a property’s condition, location, or state of livability. You can forgo repairs, save money, and enjoy a quick closing on a property that would take months to fix and sell.

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4 Ways to Sell Your House in Forbearance

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To delay a foreclose on the mortgage, lenders and borrowers can forge a mortgage forbearance agreement. If you try to sell your house while in forbearance, the lender might extend the forbearance agreement. Foreclosures are expensive and can drag out for months. Lenders want their money back fast, and they have neither the time nor the resources for dealing in home sales.

Keep in mind: the forborne amount of your mortgage must be paid back in full upon sale of the home. This comes out of the purchase price of the house.

1. Traditional Listing

A listing agent lists the home on the Multiple Listing Service (MLS) and a brokerage site (if associated with a brokerage) and produces yard signs. They pinpoint the selling price, stage and market the home, show it to prospective buyers, and negotiate offers. It takes at least 70 days to make a sale, and the agent is compensated for their efforts. Compensation is either a small flat fee at the beginning or commission upon sale.

2. Realtor

A realtor is different from a listing agent in that a realtor is a member of the NAR. Realtors have more resources than agents to sell a house, but their responsibilities are similar. They help decide the asking price, advertise and show the home, and evaluate offers. Upon the sale of the home, they receive a percentage of the sale price as a commission.

Selling with a realtor takes 70 days or more, and this can be attributed to buyer actions. In the purchase process, buyers have more steps than sellers. These steps include the home inspection, appraisal, and mortgage approval. If a step is delayed or fails, it takes more time to sell the house.

3. Sell It Yourself

Selling a house by yourself is a huge undertaking. You are responsible for the following:

  • Determine the market value of your home.
  • List the home online.
  • Market the home.
  • Clean and stage the home.
  • Coordinate walkthroughs.
  • Negotiate terms of sale.
  • Handle the closing.

Without professional help, it can take two to six months to sell the house by yourself. It is also a costly venture, and if you are in forbearance, you may not have the funds to sell a house.

4. Instead, Sell to a Real Estate Investor

If you want to make a quick and easy sale without having to market, show, or stage the home, consider selling to an investor. Most investors will make a cash offer on the house regardless of its condition or while it is in forbearance. You can close fast, pay off your loan, and be free of debt.

For information under the CARES Act, Mortgage Forbearance, see What You Need to Know by consumerfinance.gov.

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Can I Sell My House while in Forbearance?

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When a mortgage borrower is unable to pay off their loan, a lender will opt to foreclose. This means they seize the property and sell it to recover their lost money. To avoid foreclosure, lenders and borrowers will forge a forbearance plan.

What is forbearance?

Forbearance means the parties agree to new mortgage terms. The borrower will pay interest-only payments or smaller payments for a few months or a temporary pause on paying back the loan. These postponed payments will eventually be due. This debt is not forgiven.

Forbearance is good for anyone who has suffered a hardship. If a home is damaged in a flood, or the economy takes a hit, and you lose your job, forbearance eases mortgage stress. It is a complicated agreement because there is no “one size fits all” arrangement. Options will vary based on the lender, type of loan, and owner requirements in the mortgage loan.

Forbearance under the CARES Act

Protections under the CARES Act apply to all federally backed and federally sponsored mortgages (Updated: April 2021 to reflect new information).

  1. For mortgages backed by the FHA, USDA or, VA, the deadline to request an initial forbearance is June 30, 2021.
  2. For loans backed by Fannie Mae, Freddie Mac, FHA, USDA, or VA, your lender or loan servicer cannot foreclose on you until after June 30, 2021.
  3. If your financial hardship is due to the COVID-19 pandemic, you have a right to request and obtain a forbearance for up to 180 days (for a total of up to 360 days).
  4. When the forbearance period ends, you are not required to repay the skipped payments in a lump sum. You can discuss a repayment plan.

Can I sell my house while in forbearance?

The answer is yes; you can sell your house while in forbearance. However, the forborne amount must be paid back upon sale of the home. This amount will likely come out of the purchase price of the home. You must also pay off the owed balance remaining on the mortgage; this too comes out of your profit.

If you plan to sell while in forbearance, your lender might extend the forbearance agreement. Foreclosures are hugely expensive and can drag out for months. Lenders want their money back fast, and dealing in home sales can exhaust their time and resources. If you sell, a lender can receive full payment of the loan and be spared the home sale process.

Things to Consider

A forbearance is, again, a temporary loan modification. Note the word “temporary.” Even if you get the lender to give you an extension, you have to consider the selling process.

You enter forbearance because you cannot afford to make regular monthly mortgage payments. Now consider:

  • If a home needs repairs or renovations, can you afford these?
  • Can you afford professional cleaning and staging services to maintain walkthroughs?
  • If you hire a realtor, they get a commission fee from the purchase price of the home. Selling a home costs money, and if you already have trouble making mortgage payments, can you really afford to sell through a traditional listing?
  • In sum, can you afford to sell to another hopeful homeowner?

Instead, Sell to an Investor

If you want to sell fast and make a profit, consider selling your house to an investor. Most investors will make a cash offer on a home regardless of its condition or while it is in forbearance. You can enjoy a quick closing, pay off your loan and delayed payments, and be free of the menacing debt.

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What Makes Your House Unsellable

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Most things can sell at the right price, but a home is a big investment, so buyers are more scrupulous. This is where they are going to live, so it needs to be “just right.” Here are 7 items that can make a house unsellable.

Undesirable Location

Location, location, location! It matters. Few buyers are willing to live near an airport, railway, or busy highway because of noise. Living next door to loud neighbors is a turnoff, and a dicey neighborhood with a high crime rate is unnerving. High-risk disaster areas and flood zones scare many buyers away. Most times, a house in a bad location can only be sold at a low price.

Outdated Home Style or Décor

Would you want to live in a home that looked like the set of “That ‘70s Show”? Most buyers want a home with the latest interior trends and new materials. If you want to sell, you may have to fork over the money for renovations.

Mold and Dampness

Visible signs of a leak concern most buyers. They worry if a home has a dampness issue, this could present later problems, like harmful mold. Dampness could be due to bad plumbing or a leaky exterior, and no one wants to buy a home that needs immediate repairs.

Neglected Maintenance

It is one thing to be busy or short on funds, but if you neglect maintenance – your house deteriorates. Buyers often have enough money to buy a home but not enough left over to make repairs. You will have to invest the time and money to make these repairs yourself, or with the help of a professional, to pass a home inspection. If the cost in time and money is too high, your best option is to sell to an investor. Investors look specifically for properties in need of repair, so you can sell quickly and easily without spending any money on it.

Bad Odors

Have you ever entered a space and been offended by a bad smell? Imagine how your buyers feel if your home smells like a vet office, with so many animals, cages, and litter boxes. Or what if you or another member of the house smokes? Cigarette smoke is a major turnoff, as its odor becomes trapped in materials like carpeting.

Lack of Natural Light

No one wants to feel like they live in a cave. Windows and natural light make spaces feel open and bigger than they really are. You can paint a room white to make it seem brighter or add windows or skylights to let in light.

Cluttered, Not Staged Home

Buyers want to envision themselves in a home when they visit for a walkthrough. If your rooms are cluttered with belongings, this becomes difficult and makes rooms appear smaller. You must throw stuff out or donate it, then clean and stage your home, so it makes a good impression.

If you do not have the time, funds, or ability to address the aforementioned items, consider selling your house to an investor. Most investors will make a cash offer despite location, damages, or outdated designs, and most times without a walkthrough. You can enjoy a quick closing and offload your problem house.

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3 Tips for Selling a Rental Property with Tenants

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The pandemic of COVID-19 has created a roller coaster of effects in the real estate market. To prevent the spread of the virus and minimize the crisis impact, the federal government and several states, cities, and counties are prohibiting landlords from evicting tenants, be they bad or behind on rent.

Times are difficult, and rent collections are essential to help pay off mortgages, property taxes, utilities, and maintenance. Are you a landlord with a tenant-occupied house to sell? Do you have bad tenants? Are they not paying rent? Here are some things to know and consider.

1. Prior notice of a showing

Typically, you would ask tenants to be off-site during showings, but most people are staying home with the times being what they are. This can risk bad impressions between tenants and new landlords who come to see the property. Ask tenants about their schedules to find the times that are most convenient to bring buyers over. Also, state laws require you to give tenants prior notice of a showing, usually 24 hours’ notice, so they have time to prepare.

2. Presentation matters

Giving notice to tenants when there are showings also gives them time to make their living spaces presentable; at least, you hope they will take the time to clean and clear their clutter. Bad tenants may not be so cooperative. You can offer incentives, like refunding the security deposit or paying for cleaning and maintenance services, to inspire them to keep the house. This will cost you money, but the payoff is worth it if it helps sell the property.

However, if there is property damage because tenants are destructive and neglect responsibility, it is unlikely that a new landlord will want to deal with them, and it will be difficult to sell the house.

3. Transfer of lease agreements

Keep in mind that a transfer of property rights means a transfer of lease agreements. Be sure to review the items in these agreements to ensure you are not in breach of contract. There may be terms and conditions that require you to notify tenants within a certain number of days of new management. You will have to oversee the transfer of security deposits and rent receipts to the new owners and inform tenants of this action. You will also have to inform tenants of how they will pay rent to the new landlord moving forward.

If you would like to sell your property fast, without navigating bad or non paying tenants, consider selling your rental to an investor. Most investors will make a cash offer on a property, regardless of tenant issues and leases. You can offload a property that returns little profit for a sure deal, enjoy a quick closing, and be free of difficult tenant-landlord relations.

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How to Avoid Foreclosure and a House Auction

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Life is full of ups and downs. Sometimes the job market is great, and other times we are left scrambling to make ends meet. For many homeowners, a downturn can mean coming face to face with pre-foreclosure and even foreclosure.

The good news for the distressed homeowner is that there are options. Before we can discuss which options are viable for you, you will first need to determine precisely how much you owe on the property and if any assistance is available from either the government or the mortgage provider.

Contact Your Lender

The best time to call your lender is before you start missing payments. This puts you in a much better position, and the mortgage provider may be able to offer you payment deferral or other assistance. At the very least, you will be able to establish precisely how much you owe and when you have to pay it. Collecting the facts is the first step towards resolution. 

Are you already in Pre-Foreclosure?

The term pre-foreclosure frightens many folks, but it does not mean your home is being taken away or sold out from under you. At least not yet. Pre-foreclosure means that you are behind on your mortgage payments and have received, or should have received, a Notice of Default for lack of payment. During pre-foreclosure, the lender will initiate the legal proceedings to repossess the property eventually. As long as you can pay what is owed during the pre-foreclosure period, then all legal proceedings cease, and you never have to face foreclosure. 

Even if you are unable to afford the back payments, there are many ways to avoid foreclosure. And, believe me, you want to avert foreclosure if at all possible. I’ll explain why before we delve into the various options available to you.

What a Foreclosure means for the Homeowner

Without taking evasive action, a house in pre-foreclosure will inevitably end in foreclosure. Here is what that means.

  • A court ruling gives the lender full ownership of the property.
  • The occupants of the property will be forcibly evicted from the premises.
  • The lender will sell the property, generally at auction, and keep all proceeds of the sale.

Unfortunately, the consequences do not end there.

  • The foreclosure will go on your permanent record.
  • You will be unable to qualify for a loan even years after.
  • Your credit score will plummet.
  • You will be ineligible for relocation assistance.
  • The foreclosure will turn up on rental and employment background checks.

For these reasons, not to mention the stress and psychological trauma, foreclosure and the house sale at auction are a very last resort. Thankfully, there are ways to avoid it.

Option A: Find the Funds and Make the Payments

This is, by far, the best outcome. It certainly won’t be easy, but there are ways to raise the money necessary to stave off foreclosure. Doing so will enable you to retain ownership and residency of your property while protecting your credit and generating equity.

Here are a few methods to consider (the more you can apply, the better):

  • Delve into your budget and cut out any non-essentials. 
  • Consider getting a second job or renting out any unused bedrooms for supplementary income.
  • Investigate a loan modification to lower your monthly payments.
  • Some lenders will offer forbearance, meaning you won’t have to make mortgage payments (or at least not all of it) for an agreed-upon time. This can provide the time needed to get back on your feet and save up money to make the back payments.

These options are great for those going through a temporary rough patch and need some time to catch back up. If, however, you see no chance of alleviating your financial difficulty in the near future, other options may serve you better.

Option B: Equity in Your House? Sell Quickly

Why quickly? Because, depending on what stage of the foreclosure process you are in, you may not have much time before the lender takes ownership of the property, and you are left with nothing. 

This option works best if you have equity in your house, meaning your mortgage is less than the property is worth. Selling your house under these circumstances will enable you to pay off the mortgage (thereby avoiding foreclosure), save your credit score, keep a foreclosure off your record, and let you keep any money left over from the sale to start fresh.  

Here are your two best options to sell and walk away with cash in your pocket:

  1. Hire a Real Estate Agent. Although you may net a little more this way, a traditional sale typically takes months. This time factor makes it risky since that is time you may not have. Not to mention the house’s risk falling out of escrow, the expenses involved while the house is on the market (taxes, insurance, utilities, etc.), or the money that is so often needed for required repairs during a traditional sale, money you may not have.
  2. Sell quickly to an investor for cash. By using a trusted network of investors, such as offered by SolidOffers.com, you can have a cash offer on your house within 24 hours. A cash buy also means a fast close (usually within 7-14 days, so the bank won’t have a chance to foreclose). You won’t have to pay any real estate commissions, you can pick your moving day, and a cash buyer will often cover all the closing costs. You may not net as much this way, but you will be able to walk away with money in your pocket (instead of in the lender’s) while avoiding the long-term consequence of a foreclosure. 

If you are pressed for time, selling your house quickly to a cash buyer is often your best route in avoiding foreclosure. Not everyone has equity in their property, though. So, what to do if you owe more on the mortgage than your house is currently worth?

Option C: Money out of Pocket

Of course, you could sell your house for less than the mortgage amount and then make up the difference yourself. This, of course, only works if you have the funds to do so. Even then, it is a reluctant option. Nobody wants to pay the bank out of pocket and receiving nothing from the sale of their house, but the consequences are far less severe than a foreclosure. For some, it may be their only option.

Option D: Short Sale

If you are upside down on your mortgage, you may want to consider a short sale. A short sale allows you to sell your house for less than you owe on it and, usually, walk away without debt. But there’s a catch. 

Since your lender will receive less than the mortgage balance, they first have to agree to a short sale. Not all lenders will, and those that do will have the final say on any offers. Your credit score may still dip, but not nearly as much as with a foreclosure. There are some other drawbacks too.

Since the lender is involved in the selling process, the escrow period can take months or years once a buyer is found. And there are no guarantees with a short sale. If the best offer is well below the mortgage balance, the lender may refuse the sale or try to hold you responsible for the difference (depending on the laws in your area).

A foreclosure is never easy, but fast action can save you time, money, and grief. Your best option is to make up your payments.

Your second-best option, if you have equity in your property, is a quick cash sale. Doing so will avert foreclosure while putting the remaining proceeds in your pocket instead of the lenders. And that, we can all agree, is where your money belongs.