Episode 72, Part 1: Home Partners of America, with Amy Kramer
John Schutze & Andrew Thurston welcomed Realtor Amy Kramer from Coldwell Banker to discuss the unique lease-to-own program called Home Partners of America. Listen to the podcast or read more from the conversation below!
"This company is trying to answer some of the challenges in the industry with millennials getting into houses," Amy says. "A lot of studies show that millennials just don't feel that they're ready for home-ownership, but past generations have been ready at this point in their lives, so really the industry as a whole has been saying: What can we do to get them into homes?"
"So Home Partners of America said, 'What if we buy houses that people would want to lease, and give people the option to lease it for up to three years, and then decide if they want to purchase it or not?'"
"They only buy homes in hot markets and in good school districts, so they look at it as buying a sure-bet home, and they will only buy it if someone actively wants to lease it. So consumers would look for homes for sale in the $200-500k range, as long as it's in a solid school district."
"You aren't required to want to buy it, but you can go in and lease that home and the homes up for sale are often more desirable than homes that are up for lease. So you can get a great home in a lease program!" Amy says.
How does it work?
"You go through an application process very similar to what you would go through if you were looking to lease an apartment or home, and once you get approved by HOme Partners, they try to go and buy that home. The consumer has nothing on the line with this - if Home Partners buy the home, they give you a payment for a one, two, or three year lease, and it goes up nominally for each year."
"What I love about this program is that they lock in a home price increase of 3.5 to 5%, and as you know home prices in AUstin have been going up 6-9%. So if you said, 'Hey, my credit isn't great right now so I can't get a mortgage" - if you're establishing your credit but want to get into a home, you'll know exactly what you'll be paying in rent and how much it would take to purchase that house," Amy says.
"What's incredible to real estate agents is that Home Partners is an all-cash buyer, and that is usually winning in competitive bidding situations in Austin," Amy says. "If there are improvements that need to be made, you can still work through Home Partners to get that."
"At first, real estate agents were reticent because it sounded too good to be true, but it really has shown itself to be a great answer to those who are in that in-between stage, not quite ready to purchase but know that they want to get into a home."
Can you get out of it if you decide you want to leave?
"You're only required to stay one year, just like any other lease," Amy explains.
"So overall, this would be helpful for those establishing credit, or if they're wanting to save up for a down payment," John says. "Having that sense that you will one day own this home is pretty huge for a lot of people. We have a lot of clients where that's a big motivation for them, and parents just want to give their family some stability and not do a one-year lease again, or live in a community that's mostly leases."
To apply with Home Partners of America, all you need to do is contact a real estate agent like Amy Kramer who will get you the application to start the process.
To reach Amy, give her a call at (402) 639-3360. If you have questions for John or Andrew, give our office a call at (512) 524-8310.