How can I make this deal work?

Question

Here's the situation:

I have a house for sale. A woman contacted me today and said she found the house I have for sale online. She is very interested because of the location and price point of the house.

Her situation is that she is being transferred for her job (with the department of transportation) to the area where I have the house for sale. She needs to be here within the next 30 days for her new job. The problem is, although her employer has agreed to purchase her existing house, the closing won't happen for 60 days. She's wondering if there's a way for them to move into my house within the next 30 days. She says they have been prequalifed with a letter from Quicken Loans and that when their existing house closes, they plan on putting more than 50% down on their new house (apparently they have decent equity in their current house)

My question is.. what kind of contract or things can I do to help make this deal happen but still protect myself in case things do go wrong. She seems very honest and legitimate but obviously I'm not just going to take her word for it, heh.

Any advice would be greatly appreciated. This is the first time I've come up against a situation like this.

Will Barnard · Answer

Lease with option to purchase is the best in this scenario. Make sure you understand and follow your state laws regarding such contracts. Get as large of a option fee as possible, get lease payments upfront, and speak to an attorney or at minimum a loan broker to make sure you do not have any RESPA/TILA/DF issues.

Jim Viens · Answer

oh...and absolutely do the background/credit check, etc. as if she were just a standard rental tenant.

Jim Viens · Answer

Personally I'd keep it simple. Get about $10k as an option fee (that would go toward the purchase price of the house) & lease it for maybe $150-$200/mo over market rate. If she's really serious that shouldn't be an issue. If her house sells she'll probably end up exercising that option shortly anyway. If not then I would think you'll cash flow pretty well on this (depending on your expenses) AND you get to keep the $10k option fee.

Tamika Moss · Answer

I think I am late, but what about a lease with an option to buy. Protects both parties just in case something goes wrong.

Account Closed · Answer

Totally agree with above statements. Maybe consider high lease payments, maybe like $5000 - 10,000 month. So she is committed to you, if she balks I would be skeptical. Your taking a risk if you charge her normal payments, specially if the house is in great condition and your state has laws to protect the tenants.

Ron

Brian Gibbons · Answer

Lease purchase, create a lease, create a sale and purchase, 3% down, non refundable, seller is protected

Donny Trana · Answer

@Jim Viens

That all makes sense. Thanks for your help!

Donny Trana · Answer

Some good advice so far. Thanks guys.

I talked with the attorney I'd be using for closing. He agreed a lease with option to purchase would be the best route if I want to pursue this. He said I need to figure out what I want for the option amount and the monthly lease.

I'd be selling the house for $95k. So what do you guys recommend the appropriate amounts be to protect myself. I know $5-10k lease payments were suggested above. Does that seem appropriate. Also, what about the amount for the option?

Also, should I do like a full credit and background check, etc on this person to verify everything their saying?

Jim Viens · Answer

...or just a straight month-to-month lease until the other house closes. Then just treat it like a normal purchase.

How can I make this deal work?

How can I make this deal work?

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