House Wrapping Procedures - By: Paul Zalitis

On marketing their property, most people choose the first option they think of and that is to sell their property for a lump sum cash amount – the quantity paid by the buyer is utilized to pay off any existing loans or mortgages on the property and any other charges. \r\n\r\nHouse Wrapping is described as selling your property to a buyer who gives you the agreed price value in divisions over a settled period of time. Though you may still hold the mortgage repayments in your own name, and therefore ownership of the property, every month you will pay these payments directly from the new buyer, along with the final transference of ownership papers made after paying the last installment.\r\n\r\nThis is of absolute benefit for many of those Australians who are getting into fights over the rental crisis they are experiencing right now. At rapidly increasing rates, Aussies wishing to own their own home is becoming harder to achieve; Australian\\\'s wages are vastly spent on renting their home so they cannot save anymore to buy their own. It was reported recently that rental prices in the areas around Sydney are well over $400 a week and that the quantity of people looking has doubled from 20% to 40% in the past four years alone - taking them nearly two months to search for somewhere to live appropriately.\r\n\r\nPeople are almost falling over themselves to offer more than the asking price for rent in a desperate bid to put a roof over their head and even paying a month or two in advance to secure the rental agreement.\r\n\r\nSo you can see why the idea of not only finding a place to live, but finding a place that offers them the security of permanence is more than a dream come true.\r\n\r\nBoth the vendor financier and buyer are free to negotiate on the price and terms of the financing as long as they adhere to any laws and regulations in their state. A down payment is required and is often set at around the 20% mark but you can get quite a wide variable on this (as much as 30% or more).\r\n\r\nIt has to be noted that in South Australia, house wrapping is illegal (only the government can offer vendor finance). Apart from that though, every other state in Australia basically runs along the same rules though it is very wise to talk to an expert in property wrapping such as myself to ensure that you do not breach any laws or settle on an agreement that cannot be seen through.\r\n\r\nWhat are the benefits to house wrapping?\r\n\r\nThe benefits to house wrapping are seen on both sides of the transaction making this a great way to achieve a win-win situation for everyone.\r\n\r\nFirst of all, the new buyer has the opportunity of owning their own property whereas they might not get that anywhere else – self employed people are usually discriminated against when it comes to financial institutions lending them money for house purchases.\r\n\r\nSecondly, until the final payment is made on the property, the current owner remains the legal owner of the property – this minimises the risk that you will lose your biggest asset if the new buyer fails to make payments.\r\n\r\nThirdly, once entered into the agreement, you as the vendor financier are no longer responsible for any repairs to the property. You are also no longer responsible for rates or any other taxes that a home owner is required to pay on a property. The responsibilities for all of these are transferred to the new purchaser.\r\n\r\nFourthly, instead of playing as a landlord in this honour; with all of the responsibilities that holds, you are instead performing as the financial provider. You get money to pay the mortgage each month and also get excess as clear profit for you. \r\n\r\nTo this end, what you will earn from this arrangement is locked in at the start of the contract. The purchaser earns on any rise in the value of the property.

About the Author

Paul Zalitis is a positive cash flow property investing expert and coach, who regularly contributes articles and ebooks designed for the First Time home wrapper.His latest Book, "Opportunity Housing Complete Guide" is available at: where you can also access free DVDs and training.

Article Directory Source: http://www.articlerich.com/profile/Paul-Zalitis/225819

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