Rent to Own - FAQs

Q.I keep reading about Lease Purchase, Lease Option and Rent to Own are those all the same thing?

A. On our program, yes they all describe the type of transactions we specialize in.  Our program consist of  3 parts: a Lease, an Option Agreement and a Purchase and Sale agreement.  We often use the terms Lease Option, Lease Purchase and Rent to Own transactions interchangeably to describe our Rent To  Own/Sell Program.

 
Q.How exactly does your Rent to Sell Program Work?
A. In a nut shell we place pre-qualified future buyers (aka: tenant/buyers) in your property, who will lease your home while we work with them to get them mortgage approved ASAP, once they have their loan approval in place then we can then finalize the sale of the property.
 
Q. How does the “Rent to Sell Program work?
A. We work with you through every step of the process.   Our services include:
  • Advice on how to improve your home to make it ready to sell
  • Promoting your home to our growing list of qualified VIP Rent to Buy Buyers
  • Robust Marketing of your property: including professional photography and videography; your property will be seen by millions of potential buyers via our extensive list of marketing partners locally, regional and nationally
  • We coordinate and show your property to prospective buyers
  • We have our mortgage partner & credit coaches screen all interested tenant/buyers to find out when they can buy
  • We handle all the necessary paperwork 
  • We work with the tenant buyer to get them mortgage qualified  ASAP
  • Facilitate and/or executing the final sale of the property
  • Flexible marketing you are free to market the property yourself if you wish
  • We have combo plans available to market for traditional & lease purchase buyers
 
Q. What kind of marketing agreement will I actually sign?
A. I’m glad you asked; we are very flexible.  The first thing we’ll need to get started is our Marketing Agreement.  We will need permission from you the owner, (or your Realtor if  you are already listed), so we can begin to market and show your property to our Lease Option Buyers. Our Marketing Agreement is non-exclusive and you can cancel anytime, allowing you or your agent to continue marketing the property as you wish to traditional buyers. Think of our marketing as an adjunct  to your other marketing  so we  can  bring you well-qualified Lease Option offers . If you or your agents sell your property before we  bring you an offer, just let us know and we will stop marketing your property to our tenant buyers; its that simple.
 
Q.What is your marketing plan for my property?
A. Honestly, there is no one size fits all. Each property is evaluated and the owner’s goals are taken into consideration when crafting our targeted marketing plan. Exposure to the right audience is key to getting suitable offers including lease purchase offers. We utilize cutting edge inbound marketing techniques to attract the right kind of buyers for your property and of course, we offer maximum exposure to millions of potential buyers by leveraging all available web-syndication outlets including Realtor.com ,Google, Oodle, Trulia, Zillow etc., and all social media marketing tools, including Facebook, Linkedin, Twitter etc., as well as, conventional tools of the trade, yard and directional signs, open houses, classified advertising etc,.  We have in-house web, video, photography and multimedia & mobile media experts that will showcase your home in the best light possible to maximize the quantity of buyers who view your property on and offline.
 
 Q.What other reasons do you believe I would benefit from,  by enrolling my property in your lease option program besides listing conventionally?
 A. Why not have the best of both worlds!  Many Realtors are GREAT at regular sales, and they focus on only working with traditional buyers. At our office not only do work with traditional buyers, but we have a whole division with proven systems in place to locate the best future tenant/buyers who will become traditional buyers in the near future. Our agents have the know how to structure a win-win lease option for the buyer and seller and we are happy to partner with other agents to bring about a successful sale, which can be very helpful in the current real estate market.  Our goal is to finalize a full sale of your property, as quickly as possible and isn’t that what you and your agent  want (if you have one)? That’s what we want too!  If you are not listed with an agent we do offer traditional MLS marketing plans and we often do combo- marketing plans where we market to both Traditional and Rent to Own buyers at the same time, which gives sellers the greatest amount of offers to select from. For more about our listing plan options, please visit our main site Nextageteam.com. Keep in mind if you are listed with another agent, and are interested in having us market your property on our Rent to Sell program, then please have your agent contact us directly so we can discuss how our combined marketing efforts can be a win win for you the seller, as well as your agent.  
Q.Why do you believe you can find a better tenant than I could do on my own?
A. When you advertise your home "For Rent" you will attract just that - Renters!   Do you want a "career renter" living in your home? The potential nightmare scenarios are well known. Typical renters often leave a home in worse condition then when they moved in.  They are known to be relentless at every turn regarding doing repairs etc. We know our tenant buyers are much better candidates due to the fact they have a home ownership mentality and view the property as their future home, which is what it will be in once they finalize their loan. Our future buyers are willing to pay a reasonable option fee upfront (typically 3.5 - 7 percent of the purchase price)  to prove they are committed to the process.  In other words, "They have skin in the game."
 
Q.What is the average time it takes to start seeing lease option offers coming in?
A. That’s a tough question to answer, because this will depend on how attractive our buyers find your house and we can’t guarantee results. We’ve seen offers on some properties in a matter of days, but typically , if your home is attractive and is realistically priced about 75 percent of the homes we market are “under contract” within 20-60 days
 
Q.What are the upfront cost associated with the Rent to Sell Program? 
A. There are NO upfront out-of-pocket expenses due from the seller for our tenant buyer placement service..  Generally a portion of the upfront option money provided by the future buyer is more than adequate to cover commissions and any attorney’s fees required to finalize all the paperwork needed.  (We always recommend using an attorney for all our lease purchase transactions and we recommend several attorneys that have reasonable fees and who are very knowledgeable about closing Lease Purchase transactions). On the back end a reduced commission is due from the seller when the tenant buyer performs and closes on the home.  No commission is due if our tenant buyer doesn’t preform and again since we like to be paid in full, we consistently work with tenant buyers truly committed to completing the full purchase.  Worst case scenario; if the tenant buyer doesn’t perform you would have received a long term tenant placement, basically at no cost to you and we will find you a new future buyer asap .  
 
Q.I understand that the rent to own future buyers are not contractually obligated to buy. What happens if they don’t ?
A.Occasionally this happens, and although this is not the outcome we work towards with our tenant buyers, you have to keep in mind in this worst case scenario you will have had a  tenant covering repairs and maintenance of the property while paying all or a major portion of your mortgage on your behalf during the lease term.  We generally know a head of time if the tenant buyer is going to buy your home or not, usually about 120- 90 days before the lease expires.  This gives us  adequate time so we have a head start marketing your property for a traditional buyer or find another Rent to Own tenant/buyer. We do everything we can to minimize surprises and prevent your home from sitting vacant.
 
Q.What is the typical length of the lease that is signed with the tenants?
A. 12-36 months, although many buyers are surprised to find out they are only 3 to  4  months away from qualifying for a loan. Others need a little more time,  12-24 months on average depending on their credit situation. All our tenant buyers must talk to one of our mortgage partners to find out approximately how long it will be  for them to qualify for a FHA or conventional loan.  If they can’t get a loan within 36 months or less we generally won’t work with them, unless they have a considerable option fee to put down towards a home.  If this is the case, the maximum is typically 5 years.
 
Q. What happens if the rent to own tenant does not pay?
A. This is very rare due to the stringent screening process we have to minimize this risk .  Obviously, we can not guarantee the tenant buyers,however, the biggest deterrent to this taking place is the upfront option fee the buyer puts toward the home would be at risk if they failed to make timely payments.  Basically they would be throwing their money away if they failed to pay and complete the purchase. If this were to happen, we can refer you to a knowledgeable eviction attorney who can complete an eviction at a reasonable cost.   During the few weeks it typically takes to evict, we would aggressively market the property to line up new future tenant buyers once the previous tenants have been removed.
 
Q. Tell me again why I  want to consider a lease option?
A. If you are currently not getting any traditional offers on your home, then lease purchase is your best option to get offers coming in fast.  If you need to sell your home at or above fair market value, then a lease option is the answer, it’s not uncommon for lease option buyers to pay full price or even more depending on how long the lease/option period will be. If you have already considered renting your home then, it’s a no brainier to lease it to someone who is serious about purchasing it the near future. Remember your future buyer  will also agree to maintain the property and handle any needed repairs before they buy and will not think of you as a “landlord on call 24-7”.
 
Q. Okay, this Rent to Sell program sounds pretty good. You’ve answered all my questions,  so what’s the next step? 
A. Simply contact us or fill visit our get started page and fill in your information and one of our lease option specialist's will be intouch with the details of how to move forward with our program. 
 
 
We appreciate your taking time to read through our FAQ’s, however, if you have additional questions we didn’t cover, please let us know and we will answer your question right away. 
 
 

At Bloom Realty, we believe we're able to go beyond listing and selling real estate, to creating real opportunity to make a difference.  Our Lease Option Purchase program... Read more

"Jimmy, thank you so much. After months and months of trying to sell our home the traditional way, you and your Nextage team brought us a buyer in less than two weeks! You’re fulfilling a vital need for both buyers and sellers. I truly appreciate your integrity and dedication to producing a win-win situation for myself and my buyer."

Jeff & Tina S., Westside
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