Minimum Deposit To Accept On A L/O MV $80k
Hi, I want to do a l/o as soon asap. juggling 2 pymnts and heating season is coming. I know that the less I am willing to accept the quicker I will get someone but also want to cover my butt.
Also, I have seen some posts in here that you should do a credit check. if they had good credit would they need to l/o?
Is there a ballpark min deposit to look for. thanks Wendy
Some will have decent credit, but they just moved into town and may need to establish residency and/or they want to test-drive the house, neighbors, and neighborhood. Most will have lousy credit. I would get a minimum of 3 percent. Of course, the more you get, the less problems you are likely to have from that T/B. I always shoot for 5 percent or more. Why not ask everyone, "How much money do you have to put down towards your beautiful new home?" Many think they have to pay 10 percent, but they don't have 10 percent (but may have 6 or 7).
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Thanks LKO, Thats a good way of possibly getting more than I would actually accept. But do I check credit if they have 4-5 % deposit? Thanks again, Wendy[ Edited by rubbertoes on Date 11/09/2004 ]
If I get 5 percent or more down, I don't care about credit, but I do try my best to help them buy. If bankrupt (Chapter 7), they should be at least 12 months in when I sign with them.
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KLO, thanks! should the rent charged be in line with what their payments will be once or if they do purchase? Endwy
Rent should be fair market rent (or a little higher), but if you can pursuade them to pay even more by offering double rental credit, then do so, because the higher the rent, the better it looks to a lender at qualifying time (if rent is higher than the mortgage payment will be).
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When you say double rental credit wht do you mean?thanks in advance
For example, if the T/B will give me an extra $200 in rent (keeping in mind that I'm already charging a little higher than market rent to begin with), I will double that amount in rental credit (toward purchase price only).
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Thanks for all the help and input. I did get a tenant buyer with 5% down. Best regards toes
What happens after the l/o term they can't get financing. How can they t/b buy the house? And do i need to return that double rental credit?
In the event that the tenant/buyer does not exercise the purchase option all accrued credits and deposits are understood to be non refundable. Toes
Congrats Wendy on your success!
How did you accomplish this long distance? What exactly did you end up doing to get this done?
~Ce
Thanks CE, I put an ad in the homefinder in the area of the home with my ph # in it. I then called the next door neighbor and offered him $500 to meet the prospects and show them the house. Sent him copies of the lease and option. I explained the terms completely to everyone over the phone and walked my tenant through the paper work etc. Wendy