Ahead of major public holidays the Russian Air Force often dispatches up to 12 cargo planes carrying loads of silver iodide, liquid nitrogen and cement powder to seed clouds above Moscow and empty the skies of moisture.

A spokesman for the Russian Air Force refused to comment.

June 12 was Russia Day, a patriotic holiday celebrating the country’s independence after the break-up of the Soviet Union.

Weather specialists said the cement’s failure to turn to powder was the first hiccup in 20 years.

The homeowner was not injured, but refused an offer of 50,000 roubles ($2,100) from the air force, saying she would sue for damages and compensation for moral suffering, Interfax said.

Timing – Loss mitigation departments are swamped. One lender told us they have had to create a whole new department to handle the volume. Another lender advised that their “closers” are assigned as many as 40-50 properties a piece. Processing time can be 6-8 weeks, depending on the lender and provided things go smoothly. A few things you can do to speed up the process are:

What is a Lease Option?

A Lease with Option to Purchase is a lease that gives the Lessee (Tenant) the right to purchase the property at an agreed-upon price under certain conditions.

To simplify, think of a Lease Option Agreement as two seperate documents. The Lease (rental agreement), which spells out the terms and conditions under which the Lessee will rent the property from the Lessor.  And the Option, which spells out the agreed upon price that the Lessee may purchase the property and the time period the Lessee has to purchase the property.

      Example: Abel leases property with an option to purchase. He must pay $500 per month rent for 12 months: at any time during the rental period, or after an agreed up period of time, he may buy the property (but is not forced to buy) for $100,000.

Typically, Abel would be required to pay consideration (anything of value given to induce entering into a contract; it may be money, personal services, a product, etc. Typically money in the amount of 3-5% or more of the agreed upon purchase price.) In a properly structured Lease Option Agreement, if Able elects not to exercise his Option OR is unable to exercise his Option, he would forfeit his consideration. This compensates the owner for keeping the property off the market during the term and for locking in the purchase price, regardless of whether home values increase.

Since we have a Lease (rental agreement) we also need to have a security deposit from our tenant. Usually, this is an amount equal to or slightly less than the monthly rental amount. I like to set the security deposit at $25 higher or lower than the rent amount to avoid confusing this with the rent.

When we structure our Leases we don’t mention or refer to the Option agreement. It’s a totally seperate agreement. However, our Option agreement does include language that says if the terms of the Lease are not fullfilled, the Option becomes null and void.

Why Consider A Lease Option?

For sellers: A Lease Option can provide debt relief and allow you to move on with your life. If you’re faced with two mortgage payments, or are unable to sell for some reason, Leasing Optioning your home can be a good alternative. I prefer Lease Options to straight Leases (rental agreements) for several reasons. Your tenant/buyer is acting as a future owner so chances are they will take better care of the property and pay on time. Because more money is put down, there’s more to lose by defaulting. Tenant/Buyers will sometimes even make improvements to the property in anticipation of eventually owning the home.

 When I put a tenant/buyer into a property, I also explain that they are responsible for day to day maintenance items (sinks, toilets, minor repairs, etc.) while I remain responsible for the major systems of the house (roof, furnace, a/c. structural, etc.) With a straight rental, I’m responsible for any day to day maintenance issues.

For buyers: It provides the opportunity to “test drive” a home before buying. The Option Consideration locks in the price during the term and gives the exclusive legal right to purchase the property, but doesn’t require it. If the Option is exercised, all of the money down usually goes towards the purchase. Since the price is locked in, buyers profit from any appreciation during the term. No upfront loan qualification is usually necessary. It allows additional time to save down payment monet, fix credit problems, etc. while actually living in the house. Many buyers have enough income to afford a home but aren’t yet ready to obtain traditional financing. Also, no taxes to pay during the Lease term and a quick move in. Buyers also have the benefit of having their rent work for them by earning rent credits towards the purchase of the home.

For investors, Lease/Options can be profitable and provide a great service for buyers looking for a place to call home. Many investors have built profitable businesses from Lease/Options alone.

Downsides and Risks

Some of the down sides for sellers are the possibility that the tenant will tear up the house and may not eventually qualify to purchase the home. You may have to evict and you may have periods of vacancy and some repair expenses. One note for sellers; if you have an adjustable rate mortgage, be sure to review the terms of your mortgage and understand when the note adjusts, how often it adjusts and how much it adjusts and plan accordingly.

It’s important that buyers carefully review the paperwork before signing. I saw a Lease/Option once that basically said the seller had the right to sell the home to another buyer at any time with just a 30 day notice. The tenant in this example, would have lost the right to buy the home and been forced to move on short notice if the seller decided they wanted to sell to someone else. The tenant was prepared to put down a large amount of consideration and finish the basement. If they had, and the seller sold to someone else, well……….. it could have been ugly. An animated discussion at the least.

Another risk for buyers is the homeowner not making the mortgage payments and the buyer being forced out by foreclosure. I’ve talked to several tenants who were unfortunately put in this position. One solution is to have a third party collect the rent payments and forward the appropriate amount to the lender.

Seek Help if Necessary

While this can be and often is a win/win for sellers and buyers, guidance and due diligence are important. Unless you’ve done this before or know someone who has successfully, it’s important to consult with a professional.  A licensed Accredited Consultant In Real Estate, Attorney, or both will help you navigate and troubleshoot.

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“Mr. Speaker, I rise in support of this legislation, though not without some reservations. I share the concern of my chairman and my colleagues about the sub-prime mortgage crisis.While we are all ultimately responsible for the contracts we sign, there were clearly failures in the market that led people to buy homes larger or more expensive than they could really afford, or to accept mortgage terms that might quickly become unsustainable.The result has been a growing number of foreclosures, which, in turn, puts downward pressure on other home prices. Moreover, when a bank forgives some or all of the mortgage, that cancelled debt is treated as income and is subject to tax. Too many people are learning the hard way about this “kick-’em-when-they’re-down” feature of the tax code.”

This is somewhat good news to those homeowners who have been forced to sell short or lose their home altogether. Clearly there is still alot of debate on who is to blame for the sub-prime mess and while some may not agree with this provision, I feel like it’s appropriate. The measure says that this applies to “…indebtedness incurred to acquire a principal residence.” Investors who got into trouble, are still on the hook as far as I can see.

Click here for the full text version of the bill.

Click here for a summary

So lets go down the street to a different restaurant. We’ll call it Harry’s Hamburgers. You walk into Harry’s where you’re greeted by a hostess. The restaurant isn’t very busy, but you decide to take a seat and have a look at the menu. The hostess hands you the menu, briefly goes over the highlights and tells you that the restaurant has a policy of limiting the number of customers they prepare food for at any one time in order to keep the quality standards at their highest and to give you the best possible customer service. She also explains that the chef, Harry, will be happy to fix anything you want on the menu, in any combination, exactly the way you want it prepared and that because you have a menu of choices, your cost for this meal will be significantly less than the other place up the street. Unlike the other restaurant up the street, the prices are always the same. You choose and pay only for the items you want. After looking over the menu, you place your order. A few minutes later, Harry appears. He introduces himself, tells you that he’s spent the last decade learning everything he can about hamburgers, and that he will personally be preparing your food. He just wants to make sure he understands exactly what you want and how you want it prepared.

Sound a little better? That’s how it should be right? Which brings me to my point. When you work with a Real Estate Consultant, an Accredited Real Estate Consultant, that’s exactly what happens. You receive and complete a needs analysis to determine exactly what your unique needs are. Then you review your analysis with a consultant to go over a menu of choices that includes all of the tasks which can be performed along with the associated fees that you can choose from based on your needs, goals and budget. The consultant provides guidance, expertise and advice, even if it isn’t in his or her best interest. The consultant isn’t concerned about receiving a commission and “getting the listing” because they aren’t paid a commission or a percentage of anything. They are only paid for actual work performed. And whether you home is an $80,000 starter or a $1 million dollar villa, you receive the same high level of service at the exact same cost.

 Only 1% of licensed agents in the country are currently ACRE’s or Accredited Consultants in Real Estate. To find an ACRE in your area, you can visit their website at www.MyREConsultants.com. Or, I do happen to know about one in this area. The first actually, in the State of Missouri.