Keith and Mary W. had been renting a 3
bedroom/2 bathroom house on University since
moving to Champaign 5 years ago. Keith had
accepted a job as a Software Engineer, thus
the relocation from Indianapolis.
However, before Keith was extended his
current position he had endured a 9 month
period of unemployment. With Mary being a
stay-at-home Mother of two, this drought
of unemployment impacted the family's
finances severely. The effect was so great
that their house was foreclosed on.
With such an adverse effect to the Keith's
credit score, the family didn't believe
they'd ever be able to purchase another
house.
After consulting with Schwaps, Keith and
Mary were informed of the option to
purchase a house from Schwaps. They were
told that if they found a house that they
were interested in, Schwaps could acquire
the house and sell to them at an agreed
price.
Keith and Mary were very excited to learn
that they could stop renting soon and get
back to the stability of homeownership. They
returned to Schwaps expressing the
interest in the house that they were
currently renting. They didn't want to
endure
the expense and hassle of moving again and
had a preference for the Champaign Unit-4
School district.
Schwaps contacted Mr. Phillips, the owner of
the property, and expressed that Keith and
Mary were interested in the possibility of
selling. Mr. Phillips didn't want to sell at
the time. However, he expressed that in two
years he had planned on selling the
property.
To satisfy all the parties involved, Schwaps
and Mr. Phillips agreed on an Option to
purchase the property in two years. The
house had a current value of $145,000. Mr.
Phillips cut a great deal and the agreed
option price of $140,000 was made between
Schwaps and Mr. Phillips.
Schwaps then extended Keith and Mary the
option to purchase the house. The price of
the house was based on a 5% appreciation of
the then current value ($145,000) per
year for two years, or $159,863. They paid
an option consideration price of $3,000,
and continued to pay their monthly rent
amount from before.
When the option date arrived, after two
years. Keith and Mary were very excited to
exercise their option (to buy) as Keith's
credit score was once again fit for
financing and the house had appreciated at
an actual rate of 11%. This meant that the
house that they decided to purchase for the
price of $159,863 was worth $178,655. As
soon as they became homeowners again, they
had a built-in $18,792 in equity.
* The
story above is just one example of the many
ways Schwaps may serve your Real Estate
Needs |