When do you get paid?

[MikeT/NC 5]

Say you got a prospective buyer that says he has the money for the down payment and income to make the payments. Do you try to verify this? Is there any need to try and verify anything cause nothing he tells you really means much till the mortgage broker can look at his situation and says if he does X Y and Z then he can qualify within a certain amount of time.So I guess only when you get the go ahead from your broker can you proceed and in the meantime you continue to market the home. Is this about right?

[MichaelC 160]

Mike, the prospective t/b needs to fill out a rental app. There will be some info on there that can be verified, such as employment, previous rental history, etc. Confirming any cash on hand they have will be impossible unless he shows you a current bank statement. . .something I find unlikely. Income could be easier to verify with some recent payroll stubs.

Personally, I don't go to that extreme. I collect a rental app and a deposit. The deposit is nonrefundable unless the app is rejected. This usually separates the legit ones from the pinheads.

Assuming they are acceptable to the homeowner, it's time to complete the paperwork, which is when they are required to pay the option consideration. That's your payday.

But until all that happens and the agreements are signed, I continue to market the property as if these folks don't exist.

[MikeT/NC 5]

How much deposit do you usually collect? And after that's collected I assume you run your own credit report just to see if they have any chance at all of ever qualifying Then how do you handle getting the two parites together. Do you usually all just meet at the house being sold? When getting the docs assigned over to the t/b do you do this at a lawyer's office or just at the kitchen table? Seems like they may think it's more official if you do it in front of a lawyer.

[MichaelC 160]

How much deposit do you usually collect?

No set amount, Mike. $500, $700, half a month's rent, etc. Whatever it takes to get the deal moving forward and enough so they feel the pain if they lose it. This will also tell you early on how serious they are. If they squawk at giving a deposit, or want to give you a hundred bucks, you know they aren't serious.

 

And after that's collected I assume you run your own credit report just to see if they have any chance at all of ever qualifying

Yes, but the final decision as whether or not they are accepted is the homeowner's. At least, the way I do things.

 

Then how do you handle getting the two parites together. Do you usually all just meet at the house being sold? When getting the docs assigned over to the t/b do you do this at a lawyer's office or just at the kitchen table? Seems like they may think it's more official if you do it in front of a lawyer.

I never use an attorney to wrap up the signing of a lease and option agreements. Unnecessary, and a sure way to watch your deal go down in flames.

[MikeT/NC 5]

Thanks MC, Just wondering do you have the seller sign something saying he was informed that he had to change his insurance to a renters policy? Am I overthinking this or is it the fact that I've been a landlord for the past ten years and have lost all faith in humanity? Tenants will do that to you ya know.

[MichaelC 160]

Just wondering do you have the seller sign something saying he was informed that he had to change his insurance to a renters policy?

I suggest they should because it will result in a lower premium for them. But I don't require they do and nothing need be signed. It's their money.

 

Am I overthinking this or is it the fact that I've been a landlord for the past ten years and have lost all faith in humanity? Tenants will do that to you ya know.

Hehe. . .yes, you are overthinking this, but on the other hand, who can blame you for losing faith in our fellow man? We are one screwed up species.