You have been Approved-What’s Next?
In a rent-to-own sale the seller allows you, the future buyer, to live in the home for a while as a renter before you actually purchase the home from them. Before you move into the seller’s home as a renter, you and the seller would agree on the sale price and other terms. You would pay the seller a non-refundable option fee. Both you and the seller would sign some paperwork covering the lease, the purchase and the option
Once you have been approved by your seller, you have a few little details to take care of. You know things like moving into your new house, signing contracts and so forth. Here are a few tips from my book Rent-to-Buy that will help you.
Create a Folder for Your New Home
I strongly recommend that you get a file folder and keep all of your documents in it. This folder should have copies of all your contracts and paperwork. You should also keep copies of all payments, receipts, etc., in the folder during the lease period. An important part of being able to get a mortgage at the end of the rental period is having organized documentation to create a strong paper trail.
Draft All Documents: Rental Agreement, Sales Contract, Option Agreement, Memorandum of Option and Affidavit of Liens
Prepare the contracts before you move in so that you have everything ready to go. All of these contracts are available in my companion course, ‘Rent-to-Buy’, which is available in the “Wendy’s Store” section of www.WendyPatton.com. I go into detail on this in my course with an audio step-by-step instruction CD to assist you.
Check if Taxes Have Been Paid
You’ll want to make sure the seller is paying their property taxes and that they are current. If the seller has a mortgage, there is a good chance that the lender requires an escrow account to cover property taxes and insurance. In this case, you’ll probably be able to verify that the taxes are current when you verify that the mortgage is current. However, not all mortgage lenders require an escrow account, and some sellers don’t have mortgages. In this case, you’ll need to verify from another source. Usually, you can check with your local Tax Assessor’s office (or whatever it is called where you live) to make sure the taxes are current. Many assessors’ offices now allow you to do this online. Otherwise, you should call the office.
Sign All Documents
It’s time to meet with the seller and sign all of the documents. Typically, you would do this before you move in. This allows you to lock in the deal and prevents the seller from finding another buyer. You would pay the option fee to the seller at the time all documents are signed. You might pay the rent and security deposit to the seller at this time as well or when you take possession of the home. Bring a pen or two!
Rent to Buy is currently available. Rent to Buy is your hands-on guide to buying your next home as a rent to own. You can get your next home NOW without having to qualify for a mortgage until later. This is the solution you need until you can qualify for a mortgage. This is the solution home sellers need because they can’t find mortgage qualified buyers. Rent to Buy is a great option in our current real estate market. Check it out!