In my home market of Southern California we are on a price increase escalator. We are seeing price increases in most markets.
• What Home partners is offering is a way to slow the price increase to something the buyer can manage. a 5% increase annually is better than 7% or 10% or more on the open market. Years ago I personally rented a home smaller than I needed for several years waiting to get into the market until my credit improved and then buy a bigger house. By the time I finally entered the market I could barely afford to buy a house the same size I was renting. It was very disappointing. Home Partners at that time would have been a fantastic solution.
• While it's not the reason people start with Home Partners, remember you can quit. You are only committing to 12 months. And if you quit your deposit is refundable. This is hardly an option any lender is currently giving, or has ever given.
• Repair costs are added to the purchase price upfront (after the home inspection) but are shown to the buyer before the escrow completes giving the buyer the chance to approve them and move forward or not.
• In practice it's usually much simpler. For example if a home is listed for $500k HP may offer say $480k.And because they buy cash they often get discounts. On top of that there may be $5,000 in closing costs and $5,000 in repairs. They will attempt to get the seller to covers some or all of the repairs but assuming they didn't pay anything the buyers purchase price in this example would be $490k or a saving of $10,000 off the asking price. This is because HP doesn't make money on the initial purchase. While this is only an example I've found it to be fairly common.
• Home Partners is better than typical Owner Financing. Why? It's Cheaper, It's faster, and the selection is huge. I've trained over 200 agents how to do owner financed deals properly, legally, and safely. But that's not the primary issue with normal owner finance. Typically even finding an owner willing to finance is very difficult. Secondly that seller usually wants a 10-15% or Higher non-refundable downpayment. Thirdly finding a buyer who, likes the house, is in the right price range, and has the large down and the desire to do it can be nearly impossible. Its Very frustrating for the buyer and the seller.
• Home partners is providing a new form of owner financing, or interim financing. even though it's technically a rent to own. It's not for everyone. It has costs, but it offers many self employed people, recent BK and divorce or other financial hardship buyers who are in the process of rebuilding their credit to move into the home now they want for their family and buy it with a loan later. Avoiding the need to move again, maybe change schools, or just have to start the whole process over. Moving is considered one of the six most stressful events in peoples lives. If you can avoid an unnecessary move or just settle your family now vs a few years from now, and do it with a low start up cost, doesn't that have value?
• Many complaints I've heard say it's not for everyone. Well it's not supposed to be. But that does not mean there are not people whom this program is perfect for and can truly be helped by it.
• A home purchase is a big decision. You need to weigh all the options. Home Partners is one of those options.
Have a great day,
