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MJ Smook

Lease Application Receipt and Option Consideration Receipt

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In the Lease Application form, the TB applicant agrees to pay a non-refundable Application Fee.

 

1) How much should this fee be?

 

2) Do we have a particular Lease Application Receipt form to give to the Applicant or should I just use a regular Receipt ?

 

3) Does the Applicant pay any portion of the Option Consideration at the time of completing the Lease Application form?

 

4) If yes, do we have a particular Option Consideration receipt form?

 

Thanks for your support.

 

 

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Hey MJ

 

I charge $40. for an app fee. and that covers my expenses to process the application. If everything checks out ok, I will then accept the option consideration, or part of it, to hold the house. I don't typically supply a receipt unless they ask for one.

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Thanks for your response Steve.

 

So I am assuming that at the same time that you show the house to the prospective TB, you collect:

 

$40 FEE check

Completed LEASE APPLICATION form

Completed TENANT BUYER PROFILE form

 

Then you go and do your due diligence on the applicant and it he/she checks out OK, arrange to meet again and then at that 2nd meeting, collect:

 

 

Signed OPTION TO PURCHASE AGREEMENT form plus Option consideration check

Signed RESIDENTIAL LEASE AGREEMENT form plus small security deposit check plus 1st months rent check.

 

Is this how you do it?

 

Thanks for your support

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Marius,

When Steve talks, people listen. He's been at this a long while and knows his stuff. With that said, keep in mind there isn't any one, specific way to do this.

For example, he collects $40. If I were to tell you I collect $30, it isn't any big deal.

Also, my preference is to collect a deposit at the same time I receive the Lease Application and fee. The more the better, of course, but the purpose is to weed out the curious from the serious.

$500, $1K, an amount equal to one month's rent, etc. I offer a simple, straightforward receipt that states the amount, the date, and that the deposit is nonrefundable unless the application is rejected. If the app is accepted it is part of the required option consideration.

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Marius-

 

My goal is to get the best tenant/buyer I can for the seller, so I am not in a rush to place someone and there are plenty of potential tenant/buyer prospects anyway. So if I am doing a CA, I will do my due diligence with the application, and when I receive all the information needed and they look good, I will share it with the seller for their review. When I get the seller's approval, we then move forward with the final paper work to close the deal. A SLO is a little different because I am managing my interest in the deal with a tenant/buyer.

 

Most of the time t/bs will be moving in the first day of the next month, giving me a couple weeks or so before the start of the lease. I like to get the full consideration when we sign the final paper work, but will take a partial. I will need all funds paid on or before move-in before the t/b gets the keys & possession. This also gives me time to complete the memorandum and any other lose ends to get ready for move-in.

 

"When Steve talks, people listen" Wish someone would tell my kids that! :P

 

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Steve,

"A SLO is a little different because I am managing my interest in the deal with a tenant/buyer."

Would you mind elaborating on this aspect please?

 

Thanks

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Well, I am the buyer/tenant of the seller/landlord. The seller has given me permission to sublease to a third party tenant with the option to buy. I am staying in the deal and am responsible for the sublease t/b. Therefore, it is in my best interest to place a quality t/b who is seriously interested in taking good care of the property, one who wants to buy and has the potential to buy in the near future. SLOs are my favorite lease purchase technique.

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So as you are going to be part of the deal for some time, you're making double sure that the TB is quality. I understand.

 

Thanks for your help Steve

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