To save some money on a summer vacation to Puerto Rico, Kim Gismervik decided to rent a house for her family instead of paying for multiple hotel rooms. After scouring the Web for the perfect place, she landed at Cyberrentals.com, where she found a three-bedroom villa on the north coast of the island with a grill, shared pool and backyard for $1,400 for the week.

But when the family arrived, they were sorely disappointed. The bed linens were stained and soiled, said Ms. Gismervik. The grill was old and rusted. There was mold in the refrigerator. And a loudly barking dog next door was not cleaned up after, causing the family to keep the first-floor windows shut tight to keep out the stench.

“We ended up leaving midweek the conditions were so bad,” said Ms. Gismervik, a marketing director from Albany. “We couldn’t take it anymore.” The owner, she said, later apologized for the condition of the home, but did not provide any compensation. Moreover, Ms. Gismervik ended up paying an additional $2,000 to stay at a Marriott for the rest of the trip, and the experience soured her on vacation rentals. “I would not choose ever to do that again,” she said. “I’d stay in a hotel where I knew how things are. I’d never rent from a private person again.”

The Internet has made it ever easier for travelers to search for vacation rentals across the globe, but at the same time it has also made it possible for just about anyone with a spare room to post a listing. Faced with the soft real estate market, many homeowners do just that. Houses that otherwise might be sold, or kept for private use, are going up for rent instead, and second-home owners with little or no experience with tenants are suddenly absentee landlords.

So how do you avoid the pitfalls? First, figure out whom you want to rent from. The vacation rental market is divided into two basic segments: homes that are rented out directly by the owner and those run by a property management company.

Professionally managed rentals, like most of the properties featured on Zonder.com, forGetaway.com and PickPackGo.com, promise a certain level of quality control since the homeowner pays the management company to inspect the home, clean it and handle any issues that arise —if a pipe bursts, for example, or the air-conditioner suddenly gives out. And most accept credit card payments, which affords an added layer of protection in case the transaction goes sour. But the extra security tends to come at a higher cost.

Property managers charge homeowners anywhere from 10 to 45 percent of the rental revenue for services and commission, according to Discover Vacation Homes, an association of property management companies. Some of that cost gets passed on to consumers. “There’s a middle man there, with property managers,” said Steve Hassett, who heads up forGetaway.com. “They have to make money off it. Some of that comes from the owner of the property and some from the renter, but both sides feel like it offers a lot of value.”

No such quality control exists with owner-rented properties, found on sites like Homeaway.com and Vrbo.com, but what you gain is cost savings. Both parties must work out the details of the rental agreement themselves, from the cost to where to pick up the keys.

And most homeowners take only checks or cash, though that is beginning to change. Homeaway.com will start to offer credit card payments on Oct. 15.

Regardless of whom you rent from, it’s a good idea to seek out recommendations from fellow renters. Vacation rental sites are increasingly offering customer reviews, making it easier to evaluate whether a property lives up to its description.

But how those reviews are handled varies widely. For example, Cyberrentals.com, which is owned by Homeaway, notifies owners of user reviews before they go up. This gives homeowners the opportunity to respond to unfair criticisms or to dispute false reviews posted by someone who did not stay there, the company said.

But some users say that negative reviews have been censored. Ms. Gismervik, the marketing director from Albany, said she tried several times to post a review of her Puerto Rico villa (including the yard full of dog feces next door). But Cyberrentals wouldn’t accept it, she said, and asked her to remove her mention of the neighbor’s dog since it wasn’t part of the property.

Yet even after she modified the complaint, the site wouldn’t post it, she said, adding, “They just refused.”

Brian Sharples, chief executive of Homeaway, said removal of a review was “extremely rare” and occurred only after the company had tangible proof that the renter unfairly maligned the owner. “We are more than willing to lose property owners from our site if they aren’t treating our customers fairly or their advertisements are misleading,” Mr. Sharples said.

After being unable to post on Cyberrentals, Ms. Gismervik turned to Vacation Rentals WatchDog (www.vrwd.org), which lets customers complain about vacation rentals. The site was founded last year by John Romano, who runs several vacation rental Web sites and frequently hears about unreturned security deposits and misleading ads.

Mr. Romano said he tried to verify each complaint to make sure it was really from a renter — and not a competing rental company — by e-mailing the property owner for a response and checking Internet Protocol addresses, which can offer clues as to where the e-mail message was sent from. Still, he said, “it’s mostly based on trust.”

FlipKey.com, a new vacation rental site, restricts reviews to past customers. To access the feedback page, users must receive an e-mail invitation. “By having a closed system we avoid the pitfalls of competitors leaving fake negative reviews,” said FlipKey’s chief executive, TJ Mahony.

After narrowing your search, don’t be shy about asking for more photos. If the listing says the home has three bathrooms, but only pictures two, ask to see the third. Some sites like PickPackGo.com and Zonder.com show where each property is on a digital map, so users can see how far the property is from the ocean or other attractions. Once you have the address, you can also scope out the property on Google Earth, the satellite mapping service, or Zillow.com, which lists home valuations and amenities based on public records.

(This article appeared in the New York Times on October 8th, 2008 and can be found at http://www.nytimes.com/2008/10/05/travel/05pracrentals.html?partner=permalink&exprod=permalink)

(This article is courtesy of the National Association of Realtors and can be found at http://www.realtor.org/press_room/news_releases/2008/pending_home_sales_up)

WASHINGTON, October 08, 2008

Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the National Association of Realtors^®.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.

Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” he said. “It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.”

The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.

Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”

He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun said.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said despite all the turmoil in world financial markets, home mortgages are available. “Mortgages have been harder to find, and availability and terms vary depending on credit score and location, but Realtors^® can help buyers find reputable lenders while helping them navigate the transaction process,” he said. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit.”

Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.

Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.

New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.

The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.

The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.

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¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

²Market information is from unpublished snapshot data; please contact your local association of Realtors^® for more information.

Existing-home sales for September will be released October 24; the next Pending Home Sales Index / Forecast will be released at 11:30 a.m. EST on November 7 at NAR’s annual convention in Orlando, Fla.