Q: How does the process work?

A: On the seller side, we interview you to make sure waiting a few extra months to get a higer price is the best option.

We schedule a property visit to take pictures, shoot a video, and begin marketing your property immediately to our buyers list.

From the tenant/buyer side, the process works as follows:

1. Submit a Rent-To-Own application via our website

2. Get qualified with – and approved by our mortgage expert.

3. View the property.

4. Submit a deposit to the escrow company to secure the property.

5. Be approved by the seller

6. Agree to the terms of the lease and option agreements

7. Sign all documents at the title company

8. Purchase the home in 6 to 18 months while renting it from the seller in the meantime.

Q: How do we decide on a purchase price?

A: We can always go down on the purchase price, but not up, so once we see your home, talk with you, and review the comparable sales, we will set everything as high as possible but still keep it reasonable for the market. Again with Rent-To-Own, we can be on the high side vs. if you were trying to sell immediately via a Realtor in the MLS.

Q: What happens if the property does not appraise in 18 months at the price we set?

A: If it does not appraise, you have two options:

1. Lower the buyers’ purchase price to the appraised value; or

2. Extend the buyers’ terms until the home does appraise at the price you want.

Q: How do we decide on a monthly lease payment?

A: We usually go with either the market rent or mortgage payment, whichever is higher.

Q: Why should I offer a rent credit?

A: Offering a rent credit gives the buyer a powerful incentive to pay their rent ON TIME EVERY MONTH. A rent credit only accrues in a month where the buyer pays the rent on or before the due date. The rent credits are applied to the purchase price. The amount varies based on the seller, however we suggest a minimum of $100/month.

Q: If the option fee the buyer pays goes towards your compensation, how is the seller protected in case the buyer vacates the property or causes damage?

A: The contracts make the tenant-buyer fully responsible for all repairs and maintenance, and their option fee/down payment is not refundable. Also, we have never had a buyer, who puts down between 3% and 7% of the purchase price, do anything to jeopardize those monies. Our buyers are truly a different caliber of person than your typical renter.

Anytime we have had a buyer not purchase, they have left the house in excellent condition, and some have even made improvements to the home, leaving the seller with an improved property. Additionally, we do thorough back ground, employment, rental history and credit checks.

This is not to say that there is no risk, but in six years and over 200 properties, we have never had a tenant-buyer do any damage to a property. It can be tough for them to come up with the option fee/down payment, full first month’s rent, AND a security deposit.

A home warranty is the most economical way for the tenant-buyer to be responsible for repairs and maintenance. It encourages them to call the warranty company instead of you, as the deductible is only $50 when a contractor comes out.

The buyers really want to own your home. The option fee/down payment is a LOT of incentive to complete the purchase while taking excellent care of it in the meantime!

Q: How is the down payment transferred to the buyer at closing?

A: The buyer is required to put their option fee/down payment into our title attorney’s escrow account. Once we have agreed to move forward with them, the money is disbursed…

The full first month’s rent goes to you, and the option fee of up to 7% of the purchase price goes to our company. If the buyer happens to put more than 7% down, then all of those monies go directly to you.

Q: Is the option fee/down payment just applied to the purchase price?

Yes, the option fee/down payment is considered a down payment on your home, and is applied to the purchase price. Therefore, we try to put this fee on top of what you want to net at closing.

For example, if you wanted to net $100K at closing, then we will market your property for something like $109,900, so that once the down payment is deducted, you still net 100% of what you wanted to net. Again, in this example, if you listed your property with a Realtor at $100K, then you would only net between $80K and $85K after Realtor commission (typically 5%-6%), seller concessions (typically 3%-6% of the purchase price), low ball offers (the average is 7% less than your asking price), and your side of the closing costs (typically between 2%-3% of the sales price).

With our Rent-To-Sell program, you should net 20% to 30% more than if you listed and sold through a Realtor on the Multiple Listing Service (MLS).

Q: Is the option fee/down payment used for the buyer’s closing costs?

A: No, the option fee/down payment is not applied to the closing costs – It is applied directly to the purchase price.

When it’s time for the buers to get a loan to purchase your home, they agree to pay 100% of the closing costs (not split like it would be with a traditional Maryland Realtor contract). Therefore, in continuing the example from above, if we marketed the example home for $109,900, and they put $5,000 down, then they will need to obtain a loan to purchase for $104,900 plus the closing costs.

Q: I know that certain mortgages like FHA do not allow a seller to give money to a buyer for a down payment, isn’t this essentially what would happen?

A: No, you are not giving the buyer ANY money for their down payment with our program. They are putting their own money down upfront, and because it flows through our attorney’s escrow account as a down payment, the lender will have no trouble counting it as such. Any rent credits which may be accrued are applied directly to the purchase price, not the down payment.

Q: What percentage of your buyers actually end up purchasing the property?

A: Our current stats are: 90% of our candidates go on to purchase. Now, all the properties eventually sell via rent-to-own, but there have been a couple properties where it was the 2nd family that ultimately purchased. We had one property turn over twice and the 3rd family purchased.

Q: What are the benefits to the Rent-To-Sell/Rent-To-Own model?

A: The Seller has a family living and caring for their property to a much higher standard than that of a typical renter. Every last one of our properties that “turned over” (meaning didn’t sell on the first round and was re-listed for rent-to-own again) was left in a condition that was literally move-in ready for the next family, with the exception of maybe an overall cleaning. Our buyers can test out a neighborhood and get a strong feel for what home ownership is all about. Should the buyer not like either, they can move on. The buyer also has time to secure financing on a property that they would not have been able to own otherwise .