On May 11th of this year, I wrote a column "The Real Estate Market Has...", stating I believed that the bottom had been reached in some areas of the country for residential real estate and suggested that you begin making plans to take advantage of the combination of low prices and low mortgage rates. Many of you did just that, but a much larger group simply lamented their own situation and sighed. Their houses were underwater and heading in the wrong direction and all they could do was dream. Now, perhaps it is time to face reality and also proceed with your dreams. Yes, Virginia, there is a way to do that and I am about to lay it out for you. Your part is to develop the courage to admit a mistake, or bad luck, or both. Then you need to forge the determination to move forward.

If your current residence is costing too much, is too small, is in a declining residential area, or has some other problem that time will probably not fix, then waiting for a turn around isn't going to be the solution you need.

The ideal solution would be to shop for a new residence without selling your current one. Unfortunately, this isn't practical or possible for most people. The answer is one of a few alternatives that can work specifically for you.

1. Sell the house and take the loss and/or work with the bank for a short pay to help you sell it. It isn't easy working with the bank, if that is what you have to do, but it is possible to get the outcome you are looking for.

2. Rent or lease the place for enough to cover the monthly payments or come close to covering them. If you can't reach that amount, talk with your lender(s) about lowering the payment. Again, not easy, but possible.

3. Find a lease option that meets your needs in a better area, or provides a bigger house or gives you a lower payment. Then enact number 1 or 2 above. If all else fails to get rid of your current residence, provide a deed in lieu to the bank which means you have returned the property to the bank.

If you are able to sell or lease your property, you are free to move on, albeit, a bit lighter in the wallet.

You now have an opportunity to participate in the recovering real estate market, and best of all, you will have the house you want and the opportunity to make a financial comeback. So how does a lease option work?

A lease option gives you the right to lease the property for your use and gives you the option to buy it as well, at a predetermined price. You may be required to pay an amount for the option, totally negotiable, and a part of every month's lease payment will go toward the down payment on the house. An example of how the above would be: leasing a house for $1750 a month, locking in a purchase price of $310,000, paying $2500 for the option and getting $250 a month credit toward the down payment. You would have three years to exercise the option. If you waited the entire 3 years and then exercised the option, the results would be:

Sales price: $310,000 Less:
Option Money: 2,500
Credited money (lease): 9,000 Continued...