Why buy when you can rent?

Here's a tip for buyers in this crazy market: consider rentals. Why? I'm not suggesting this because it's not a good time to buy -- it probably is a good time to buy, actually. (But more on that in future posts.) There are a lot of sellers who don't want to drop their asking price to the level that it would take to sell, but they might be willing to rent. Just agree to cover their mortgage for the next two years and they'll wait out the downturn.

One problem with this strategy is that it's hard to reach the seller without going through the agent. And the listing agent isn't exactly psyched to help you (the prospective renter) make your case to the seller. To reach the owner, check Zillow.com where 1.2 million owners have "claimed their home" and are reachable through the house's webpage (click "contact the owner"). Even for the homes that aren't claimed by the owner, you can post a question on the home's webpage, which the owner will probably see. The other tried and true method is to go to open houses and ask the listing agent or the owner in person if they'd consider renting. (That's how I ended up renting the house that I'm currently in; the house had been on the market for six months and I went to the open and asked the owner if he'd rent it to me. Two years later I purchased it.)  Finally, you can always send a letter to the home's address. (I've done this also.)

Knowing what the seller paid for the house is an important part of this game. You can find this on Zillow, the county's website, or some (but not most) other real estate websites. It also helps to know the listing price history. For example, if you're looking for Seattle real estate and you come across this listing at 3871 46th Avenue NE Seattle, you'd see that the house was originally listed for $1.595M in November but the seller dropped the price by $100K on 3/1/08. Maybe they'd entertain $3000 a month in rent, which is much less than the mortgage payment would be if you bought the house. After all, the Zestimate home value is only $1.327M which is probably less than the seller would take.
Topics: dueling digs , rentals , house prices , home values , buyer tips