Frequently Asked Questions
It is not uncommon for Owners to deny any applications with the following issues-
- A foreclosure within the past 2 years
- A Bankruptcy which has been discharged less than 12 months ago
- Continuing Negative credit history following a Bankruptcy
- A prior eviction filed within the past 4 years, unpaid rent, or a negative landlord reference
- A Felony conviction may cause your application to be denied
Can I put my property on the market for sale, lease purchase and rent, at the same time?
Yes. We do it all the time.
Do Tenants ever fail to maintain the Property
Yes. Occasionally, even though they agree to fix all problems, they let things go and damage to the property occurs due to neglect. Option maintains regular property visits to monitor physical condition.
Do you accept Section 8, or Subsidized Programs?
It is possible that an owner will accept one of these programs. If we have a home for rent/lease that you are interested in as a Section 8 or Program tenant, we will need to gather the application from you in as complete a form as possible to present to the owner, who will then make the final decision.
How long does it take to Process an Application?
It can take as little as 1 day, but it can be delayed by weekends or holidays. After gathering the information we will present your application to the owner and will let you know as soon as we have a reply. We promise to never keep you waiting longer than absolutely necessary. Can be delayed by weekends, holidays, or delay in obtaining previous rental verification information.
Is it easier to Lease Purchase than sell?
Yes. Offering your home for Lease Purchase exposes it to a larger segment of the buying public. You will appeal to a group of buyers you cannot reach using only the "For Sale" approach. You will solve your vacancy and cash flow problem quicker using Lease Purchase.
Is there an application fee?
Yes, this covers the cost of credit and criminal reporting, employment verification, and rental history. It is $40.00 per single person, and $60.00 per couple. Anyone over 18 who will be living in your home must fill out an application.
What about Rent Credit?
Occasionally, tenants negotiate hard for some of the rent to apply to their down payment. This helps them build their down payment and improves their chance of closing. The only time rent credit affects you is at closing. Like earnest money, it shows up as a credit to the tenant as previously paid money. If they fail to close they get nothing back. Only you can approve rent credit.
What are the Chances of a Lease Purchase Closing?
Rent Robin has had great success closing the Lease Purchases we have structured. We have gone through our learning curves. Experience is a great teacher. We are careful not to create false hope for either party by making deals that have little hope of closing. We do not hit 100% because we cannot control what people do. The good news is, if you look at the benefits of the Lease Purchase, there is no downside for the Owner. You win even if the tenant fails to close by having a two-year tenant who takes good care of the property and leaves money behind when they move out.
What are the costs?
The fees for a Lease Purchase are the same as a regular lease and sale. Rent Robin gets a Procurement Fee for renting the property, and a Monthly Management Fee for managing it. We manage Lease Purchases the same way we manage our other properties except for maintenance. Commissions for the purchase and sale agreement are the same as for any brokerage agreement. As licensed brokers we sell many homes to tenants. We get our commissions as you get your equity.
What happens if the Tenant Fails to Close?
We find that a significant percentage do not close for one reason or another. We regularly contact the tenant and discuss closing options. If they need more time to close we frequently ask to extend the closing date. Again, you are in control of this so you will make these decisions. If they plan to move there is not much we can do about it. They forfeit their deposit and will still be responsible for leaving the property in good condition. We will begin marketing per your instructions and complete a normal move-out inspection. Often, the property is returned in better condition than when the tenant moved in. Occasionally, the tenant makes improvements that stay with the property and actually increase the property's value.
You win whether they close or not! There is no downside to a Lease Purchase.
What if they are ready to close and you cannot?
If you have a title problem or refuse to close you have defaulted in the purchase agreement. Most tenants are willing to give you a little time to clear up the problem. If you cannot give them what you promised (good title), they will get mad and come after their deposit. They will probably succeed. Do not contract to sell to anyone if you cannot deliver good title.
Who is responsible for insurance?
You must keep a landlord policy in effect during the lease period. This policy covers the house and liability issues. Renter’s insurance is an option for the tenant but cannot be forced.
Who pays Association Dues?
If it’s mandatory, you should pay it. Unpaid association dues can result in a lien on your property and costly legal fees. You do not want to put that responsibility in the hands of the tenant until they become the owner.
Why do I need Rent Robin to Manage a Lease Purchase?
Getting contracts signed is just the beginning of the process. A Lease Purchase does not eliminate the management problems it simply puts a tenant on a path toward buying. Sometimes tenants fail to pay rent, some bounce checks, others harbor undisclosed pets and let properties deteriorate. We all want to think they are different than other tenants because they have more money at stake and have signed a purchase agreement. The fact is they are still “Homeowners in training”. Some of them have a long way to go. Training them is an ongoing process. Attentive management is needed.
Will I automatically be eliminated if I have past credit or criminal history?
Absolutely not - the information is gathered and presented to the owner of your new home. The owner(s), may choose to accept your application, or present an alternative that may work for everyone.