Teton Realty Blog

I have been trying to find someone to owner finance or lease to own, why is it so difficult around here?

October 17, 2015 By Tayson Rockefeller Leave a Comment

I’m glad you mentioned owner finance and lease to own in the same question. In a way, they’re the same thing. a summary of each;
-Owner finance is possession upon closing, usually in the form of a deed of trust. This works the same as getting a loan and buying a home, except the owner collects the payments. Usually the owner will collect payments through a third party such as a title company and a long term escrow. This way, your insurance and taxes are typically included in the mortgage payment to protect the seller from a disaster or tax foreclosure.
-A lease to own is not considered possession upon closing, but exactly how it reads, leasing until either obtaining finance by the bank, the owner, or cash at the end of the lease term. typically a portion of the lease payments would apply to the purchase price in this event.

Now, why aren’t they very popular? I think the best way to understand this is pros and cons of each. Not only that, but there are pros and cons for each the seller and the buyer, which are sometimes conflicting. In the owner finance situation, the buyer has an opportunity to recover poor credit, and purchase a home today at (presumably) a lower price. On the conflicting inside, the seller is (presumably) selling the home for a lower price today to a buyer with potential credit problems and not receiving a full cash payment to invest elsewhere. Of course in return for this, the seller will be making a return on the interest rate. That interest rate must be sufficient to cover a higher return than the seller would make investing the full cash investment elsewhere today. This might sound weighted towards disadvantages for the seller only, but there are other disadvantages for the buyer. The biggest disadvantage to the buyer in my opinion is the lack of inventory. We are already in short supply, and even shorter, approaching nonexistent supply for owner finance. That means the buyer has very little to choose from, and may be stuck with a home they really don’t want, or can’t afford just to make the terms of the owner finance work. The buyer must determine if this is the only route, even after credit recovery, the buyer can take.

With regards to the lease to own situation, this is very similar. However, the buyer may not have credit issues, but simply wants to learn about the area before moving into a purchase. Though the risk might be minimized on the credit aspect for the seller, the other terms remain the same. Even worse, they don’t have the initial cash deposit they would with the owner finance, which would come usually in full payment after the end of the lease term. Moreover, the same inventory and choice issues remain the same for the buyer. The buyer is looking for a home they will enjoy leasing, and living in, all in one. Where neither opportunities are common, this drastically reduces the availability in the number of homes to choose from, both for rent and for sale. In this circumstance I would advise the buyer to find a more affordable rental option, and keep their options wide open for a purchase after their lease is up and they have determined they want to live in the area.

On a final note, market conditions can drastically change the amount of inventory. With the two real estate markets in recent history though, it has not. In the wake of the downturn, a number of sellers had mortgages that far exceeded market value. They did not have the option to owner finance because even the initial or final payment would not recover their initial investment. Remember, in most cases an owner can only owner finance if they own the real estate out right. In today’s recovering real estate market with low inventory and supply, it simply does not make sense for a seller who can easily sell their home at market rates today, without the hassle of going through the owner finance situation. Since other markets are also doing reasonably well, the cash they would receive on a full purchase sale could be reinvested at a substantial return.

There are circumstances I did not touch on in this article. If you find yourself in this situation as a buyer or seller, and would like any free advice, don’t hesitate. Also remember to keep your eye on the Teton Valley Realty blog for other information on the topics above!

What can you tell me about water wells in the area?

September 17, 2015 By Tayson Rockefeller Leave a Comment

We have good water. It’s full of minerals, which also causes some of the hard water deposits you see in your bathrooms and kitchens. I know we are not talking about soft water systems, but most people don’t realize that there’s a good possibility your home either has a system in place, or hookups ready for a system to be installed. Almost all of the newer constructed homes have hookups – remember the plastic pipe loop next to your washer and dryer? That’s what it’s for. I’ll save you from what I know about ion exchange in regards to how these systems work. Back to wells. I decided to do this write-up because of an increasing number of buyers interested in lots that are uncertain about the cost of drilling a well, and bringing in other utilities. As far as the cost, it’s pretty simple. I interviewed a few local well drilling companies, it’s about $40/foot including a well casing. The Idaho Department of Water Resources requires a steel casing, that is tagged with a well tag number. Almost every well drilled in recent history is then recorded with the department. The department’s website, idwr.idaho.gov provides a well driller’s research tool in which you can pull up information on each well drilled that has been reported, called a well driller’s report. The well driller’s report will tell the approximate site, the types of ground materials, and at what depth. As you would guess, it also reports the exact depth of the well. The reason I am telling you this of course; the next logical question after understanding the price per foot, would be the depth. Usually, you will find a neighbor who has a well in the same area in which you are thinking about drilling a well. Now, there are no guarantees your well will be the same depth of your neighbors, but you can bet that it will be pretty close. The well driller’s research tool can be daunting unless you understand how to search by township and range, but there is also a way of searching by last name etc. On a final note, you might be thinking to yourself, “Why don’t I just buy a lot in town and hook up to the city water and sewer system?” You can! Just remember, the city will charge a hook up fee for water and for sewer, and it’s not all that cheap. The cheapest way of doing it? Locate a lot in a development with a pre-existing community well system. They’re usually pretty reliable, and fairly inexpensive to hook up to.

August ’15 Market Stats

August 31, 2015 By Tayson Rockefeller Leave a Comment

August '15 Market Stats

Glider Rides

July 17, 2015 By Tayson Rockefeller Leave a Comment

Typically scenic glider rides are offered from May through October. The rides are one hour +/-, depending on weather, thermal heating and ridge lift. The areas flown are Darby Canyon, Treasure Mountain, Alaska basin, Battleship Mountain, Ice flow lake, Snow Drift Lake, the West side of the Teton range, Table Rock, Cascade Canyon, Teton Canyon both North and South, over Grand Targhee then if there is time and are maintaining or gaining altitude, they will go across the valley to the Teton River and then back to the Driggs airport. On very rare occasions they may find enough lift to go high enough to go over the top of the Grand Teton. On a clear day, the passenger will also get a view of the Jackson Hole valley, Jackson and Jenny Lake and Swan Valley.

The glider carries one passenger weighing no more than 230 Lbs. and the cost is $250.00. which covers the cost of the tow plane, tow plane pilot, glider and glider pilot. They do not do any aerobatics during a scenic flight. It is recommended passengers bring a small hat (for sun protection), sunglasses and a camera with a wide angle lens. It can be very warm in the glider so summer attire is also recommended. They have taken passengers as old as 100 years and can often accommodate those with disabilities if they are light enough to be lifted into the glider. They generally don’t take children under eight years old because they have a habit of climbing out of their seat belt and standing up, fiddling with the controls or simply not appreciating the flight or the scenery.

It’s best to schedule a glider flight at least one day in advance, but often times we can squeeze in a last minute booking. Passengers need to understand that weather is a major factor in providing a safe and enjoyable ride and should be flexible and understanding when conditions such as strong winds, thunderstorms or low cloud cover require that we cancel, postpone or reschedule flights.

For further information or to schedule reides contact Teotn Aviation at 208-354-3100.

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