How does your Rent-to-Own Program Work?
- It’s simple! After you’ve visited a home you like you’ll fill out the Next Step form, we will contact you to go over the info you submitted and schedule a buyer meeting. This meeting will either be face-face or sometimes even via Skype or FaceTime!
- Meanwhile, based on the info you provide, we’ll know how much house you can afford, what length of time will be necessary for you to qualify for a home loan, your current credit status and provide a scope of what needs to be repaired or built up during your lease-purchase period.
- During the buyer meeting, we will go over all the other details so you fully understand and agree to the terms. These terms include: Monthly Payment, Length of Lease, Down Payment or Option Fee, Purchase Price, Possession, Roles & Responsibilities, Repairs, Utilities, Taxes, etc.
- Once you are ready to move forward, you will make a small deposit which is 100% refundable up until the time of final acceptance. We’ll also endorse a Letter of Intent outlining the terms we agreed to. We’ll next move towards final acceptance.
- Once final acceptance is made, we’ll schedule a time for you to come in with our attorney to sign the remaining paperwork. You’ll bring a certified check for your down payment/option fee and the first month’s rent. 100% of your down payment deposit is credited toward the purchase price when you buy.
- Finally, keys will be delivered to you by the possession date.
- You will continue to work with a mortgage lender and your credit repair specialist throughout the lease-purchase period. They will provide support and coaching to help you qualify to purchase your home in a timely manner.
Do I have to have a Down-Payment/Option Fee?
- Yes, in all cases a down-payment deposit and/or option fee is required. Typically you will need 3-10% of the purchase price in addition to the first month’s lease payment.
- The down payment is necessary because we’re turning over occupancy to you and also because we’re trying from the very beginning to structure everything with the goal of getting you prepared for a mortgage-ready date. The higher the down payment, the more likely banks will lend to you.
Are Pets Allowed?
- In most circumstances pets are allowed. We tend to be more flexible on this issue with lease- purchase transactions vs. a regular rental arrangement. However, for some houses that may not be the case. We would list no pets on the listing information on our website if a particular home does not permit pets.
What happens after I apply for a home?
- After you complete the Next Step Form, it is reviewed to determine how much monthly payment you can afford based on your income and current debt.
- Your qualification is not based on credit history, however, your credit report is reviewed to determine what length of time will be needed for you to be able to qualify for a home loan. You will have to apply for this. The application cost is $50 per adult living in the home.
What if I have filed Bankruptcy or Have had a Foreclosure?
- Bankruptcy does not affect your ability to qualify for our lease-purchase program as long as we have a house available for a term that will fit what you need.
- A foreclosure on your credit is also acceptable, however depending on how recently it occurred, it will effect how soon you will be able to qualify for a home loan. For Example, FHA Guidelines state that a foreclosure must be seasoned 36 months before they will consider financing a borrower. If your foreclosure is recent, it will require negotiation of a 3-4 year lease-purchase agreement.
How long does the process take?
- It is possible to close transactions in as little as 5 days from start to finish. Typically however, you can expect between 7-14 days after final acceptance until the paperwork is closed.
What are the costs or fees involved?
- Typically the Down Payment Deposit/Option Fee, Monthly Lease Payment and a $595 processing fee will cover your expenses.
- Credit Repair may be an additional expense.
How can I buy a home when I have bad credit?
- You can’t through conventional lenders, but you can with our help. Through our Rent-to-Own program, we can help you improve your credit over time. We are not extremely interested in your past credit status. Your ability to make reasonable monthly payments and your desire to be a homeowner are important to us. Our program was designed to support you throughout the lease-purchase period so that you can qualify to buy in the future.
I am renting now, how is this different?
- This is a way to help you get started toward BUYING your own home. You get to LOCK IN your equity now instead of being at risk of the market appreciating ahead of you.
Do I have to ‘qualify’ for this program?
- Yes, your qualification is widely based on 3 main factors. First is your ability make the monthly payment based on your current income. The second is meeting the down-payment deposit requirement. Third is you must be serious and committed to successfully completing the program in order to own the home.
Is the down-payment deposit non-refundable?
- Yes, If you break the lease or don’t pay your rent, you forfeit all of your down- payment deposit. You get your down-payment money credited back towards the purchase price of the home when you purchase it. This is the reason we do a screening in the beginning and help you understand what needs to be fixed before you get started. We want you to be comfortable with the game-plan. We structure the program around what it is you need and the necessary time frame to get you mortgage ready. There is no reason you should fail unless you stop doing your part of the plan or stop making payments.
What other methods of option consideration (down payment) are accepted?
- Unlike most lending institutions, we accept borrowed funds for closing. If you have a close friend or relative willing to lend you money for your option consideration, you can use that with our programs. You may also be eligible to withdraw or borrow from your 401K to purchase a home without penalties.
How long is the Rent-To-Own period for?
- The length of the lease-purchase period can vary based on your needs. Typically lease-purchase contracts are negotiated for between 6-24 months. Agreements can be made for shorter or longer than this, however in all cases, you can exercise your option to purchase at any time during the lease.
Is the price of the home established in advance?
- Yes. The price of the home is decided at the time you sign the Letter of Intent unless otherwise negotiated and stipulated in the agreement.
Who pays the property taxes and insurance during the Rent-To-Own period?
- Taxes are always rolled into the final lease amount. Anytime you lease, taxes are always included in the full rent amount. Some of our properties are advertised as a Net Lease which means property taxes are rolled into the advertised rent amount. The listing on our website will indicate if taxes are added to the advertised rent.
What is the difference between a Down Payment and an Option Fee?
- It depends on the contract being used for the purchase side of your lease-purchase. Typically you will have what is referred to as an Option Agreement in which case the money you put down up front would be an Option Fee. If the attorney is using a Purchase Agreement, the funds would be referred to as a Down Payment. In most cases we use an Option Fee which is later replaced with a regular Purchase Agreement when you’re ready to buy.
How do I know if underlying loans and taxes are being kept up to date?
- You will never make payments directly to us. In every situation we use either a licensed Property Management Company or an escrow service to collect your rent, make any underlying payments, pay taxes and distribute any other funds accordingly.
Do you use an attorney?
- Absolutely! We want to make sure everyone is protected and has a fair deal set up every single time we do business. In just about every circumstance, you will sign your final docs with our attorney. There are times we find a client may not live in the area and cannot come into the office to sign. In those situations, we will send a notary to you for the signing.
Are you a real estate brokerage?
- No. Our company is a real estate investment firm. We do not provide real estate brokerage services to the public nor do we represent any of our sellers or buyers. All of our properties are either owned by us or we have a direct interest in the property allowing us to do our lease-purchase program. Our intent is to make a profit of course but also to create a win-win for all parties with an incredible program needed by so many.
Get on Our Buyer List