We have developed a new unique way to sell homes for more money, faster, often less than 30 days even with buyer issues.
The Rent-to-Own (Lease) Program is innovative and unique. We have legal contracts specifically developed for our program. They have been approved by 2 major Real Estate Brokers; Century 21 Town & Country and BHHS Kee Realty.
Over 200 homeowners & buyers have signed onto this program with over 80% success results to date. Sellers are able to sell quickly, often for more money than today’s market value and buyers are able to eliminate rent only and actually buy a house they plan to live in for several years. You must call me for complete and exciting information on this program and how and why it works!
Seminars available at a nominal charge for 10 or more Realtors, buyers and or sellers.
Read below for more details or give us a call at any time!
SELL YOUR HOME FAST EVEN WITH BUYER ISSUES in a recovering market from one of the toughest markets our industry has ever seen.
How it works:
- You offer the house for sale and lease simultaneously. Not as an option!
- Buyer pays non-refundable deposit each year – not a security deposit*.
- Approximately 25% of first years lease payments are refunded towards closing costs or reduced price.
- A binding purchase agreement is written with a delayed purchase date.
- An 11 page lease spells out all requirements of tenant and landlord.
*deposit based on price and size of home. Minimum deposit is $3,000 and most sellers want 2.5-3 times the square footage of the house. Deposits for 2nd or 3rd year, are usually required if multi-year contract.
List price: In most cases a fair price is not an issue. Buyers often accept the list price because they know the home must appraise. In most offers, there is little price negotiation. House must appraise to mortgage guidelines at time home mortgage is processed. A reasonable price can be negotiated if the home does not appraise, or the lease can be extended for an additional year. This would be determined between the buyer and seller, allowing time for the home to appraise closer to the contract price.
Why it works: We currently have thousands of homeowners a month going through divorce, bankruptcy, self-employment, foreclosure, business failure, medical issues or temporary hardship in their life. They have good income but want to buy a house and not rent for 1 or 2 years until they can qualify for a mortgage. They are good people with good values & have the financial ability to buy a house, once they meet the mortgage guidelines.
Selling Time: Currently over 80% of homes offered on this program have sold in less than 6 weeks. Some have taken up to 4 months or longer if the home is having “buyer issues”.
Who Are They?
Rent-to-Own (Lease) Buyers:
- Self-Employed: difficulty verifying sufficient income and cash reserves for a mortgage.
- Divorced: or separated creating temporary financial hardships.
- Medical Catastrophe: large hospital and doctor bills caused credit score issues.
- Bankruptcy: resulting from job loss and unforeseen financial issues
- Foreclosures: require minimum 3 years to obtain a mortgage.
- Cash Buyers: waiting on lump sum: buy out, inheritance, lawsuit payout, etc.
- Job Change: out-of-state employees need 3-6 months on a new job to get mortgage.
- ID Fraud: inability to use their credit for 1-2 years.
- Inability to sell their house for financial reasons, need an additional 1 or 2 years to sell, but want to move now.
- Predatory lending/borrowing (fraud) in the mortgage industry.
- Moving Up: want or need larger home and know they can afford in 1-2 years, but do not want to wait that long.
Note: If bankruptcy, mortgage regulations for FHA loans require 2 year’s minimum to get a new mortgage, and 3 years if a foreclosure. At this time, a 580-620 credit score or higher is needed to get an FHA mortgage and 640-700 credit score or higher is needed to get a conventional mortgage. We recommend buyers with poor credit scores sign up with Credit Mentoring and Consulting (CMAC). They can raise scores 50-100 points in 2-3 months at a very reasonable cost.
Rent-to-Own (Lease) Sellers:
- For their protection – review buyer’s credit report.
- See paycheck stubs or tax returns
- Check ID
- Review rent history if applicable
- Personal references
- Sellers are still responsible for:
- Tax and/or association fees and homeowner’s insurance
- Filling out normal seller disclosures
- Repairs to home not covered by home warranties unless caused by buyer, other than normal wear & tear
- Receive Down payment: *not security deposit* per year
- Non-refundable deposit ($3,000 min). Deposit based on price and size of home.
- Suggest home warranty for future repairs. Tenant pays service call.
- Lease purchase contingent on lease terms being obeyed!
- 1 to 3-year program – pre-determined house price is set.
Agree to apply a pre-determined % of lease, for 1st year, usually 25%, against seller’s concession up to 6% of purchase price, or reduced price of home, or max permitted by mortgage requirements.
- Buyer is counseled to try to improve credit: CMAC*
- Approx. 25% credit of monthly lease goes against the purchase price or closing costs up to 6% of price when they buy, normally for 1st year, if paid on time. Direct deposit is highly suggested.
- The initial lease purchase deposit goes against purchase of the home, but is not refunded if not qualified for mortgage.
- A pre-determined price is set on property – house must appraise for offered price or buyer and seller must negotiate price or other terms, or extend lease another year.
- Buyer is responsible for any and all damages to house other than normal wear and tear. See Lease Agreement.
- Must get inspection on house in 7 days from contract approval, or agrees to accept condition of house as is.
- Must get renter’s insurance.
Commission: Paid by the Seller
- 50% of non-refundable lease purchase deposit paid by Seller, as advance on total commission.
- 1 month >lease split by Buyer Agent and Listing Agent.
- 6% commission minimum on purchase of house at closing! Paid by Seller.
*CMAC is a Credit Mentoring & Consulting company. They specialize in raising your credit score 50-100 points or more in just 90 days. For $375 approximately, they will explain what you must do to raise your score besides the work they perform, to remove all items from your report that should not be there. I have seen over 75 clients use CMAC successfully, including our team members and their families.
Larry Williams, REALTOR®
210 W. University Drive, Rochester, MI 48307