07 Feb RENT TO OWN PROGRAM
ABOUTRENT TO OWN PROGRAM
Pick a home then rent to own!
Here is how it works…
You can lease a home in the area you want.
You apply online to enter the program. Must have a minimum of 580 credit score and ability to make the payments.
You simply shop for homes within the website that are for sale and fit the guidelines of the program.
You then live in the home for up to five years and you can purchase it any time during the lease term after the first year.
After I do the application and approved – what happens next?
1) You search for homes within a large inventory of homes for sale that qualify for the program
2) You sign a lease with a one year commitment
3) You have a security deposit
4) You can rent this home up to 5 years
5) Any time after the first year you have the right to purchase the home at a predetermined price
6) Mutually responsible to maintain the home
WHAT ARE SOME OTHER QUESTIONS ABOUT RENT TO OWN
What are some other questions about rent to own?
- How much can rent increase each year? No more than 3.75% a year.
- How much can the right to purchase price increase each year? Currently it is 3.5% which is currently the Twin Cities average of 7%.
- What if the house needs a little work at time of purchase? In the lease you can ask to have up to $2,500 to cover maintenance adjustments you would like done.
- Who is eligible for the program? We have certain minimum criteria for our program. Your household must have an annual income of $50,000. You must have stable employment. They cannot accept you into our program if you or anyone in your household has a history of eviction or a pending bankruptcy. Everyone in your household will be subject to a criminal background check.
- How do I apply to the Program? Every member of your household who is 18 years of age or older must complete the Pre-Qualification Application and the Full Application. The Full Application requires certain information. Including residence and employment history, for each member of the household. You also must provide income verification for each member of the household. If you are moving from a different state or starting a new job, they will need confirmation of your new job and income.
They take several factors into consideration when reviewing an application, which include household income, rent-to-income and debt-to-income ratios, rental and housing history, employment history, criminal history, and FICO® scores.
They will usually make a decision on your application within 1 to 3 business days of receiving all required information.
6) How much does it cost to participate in the Program? They have a one-time Application Fee of $75 per household. Paid online as part of the application process. This Application Fee covers all applicants in the household and is nonrefundable.
7) How do I find a home once I’m approved? You work with your Jeff Anderson RE/MAX Results or one of his associates to search for homes that meet the purchasing criteria. Generally, this means that the home should be:
– Located in an approved community (home is on the website and is not near features that may negatively impair value)
– Listed for between $100,000 and $450,000
– Located on a lot no more than three acres with a minimum of two bedrooms
– A single family home or fee-simple townhome. Condo associations, condo interests, commercial and multi-family properties are not eligible for the Program. It can’t have HOA restrictions on renting. Only a traditional sale. No short sales, auctions, and REO’s.
– Free from material deficiencies. We can submit up to $2,500 for issues per the inspection.
– No guest houses/ in-law suits with separate entrances
– No homes with swimming pools or other water features
Once you have selected a home, Jeff Anderson with RE/MAX Results will submit it to them online for the rent to own program
8) Is there a required deposit? Yes. Generally, they require a deposit equal to two months’ rent. But not applied towards your rent. If you decide to leave the home at the end of anyone-year lease term. And you have been in compliance with the terms of the lease. And return the home in the same condition it was in when you moved in (normal wear and tear excepted). You then receive the full deposit. Or credited to the purchase price if you buy the home. The full deposit (less any outstanding charges owed to the program) is also returned to you if you exercise your Right to Purchase the home.
9) How long does it take from when I select a home to when I move in? On average, it takes approximately five to six weeks from the time you enter into a purchase agreement for a home until the day you can move in. There are several variables that may affect the move-in timeframe. Like the length of negotiation with the seller leading up to when we enter into a purchase agreement. Or what the home inspection reveals with respect to required repairs. And the renovations you request. You will be kept informed throughout the entire purchase by Jeff Anderson RE/MAX Results and renovation process so that you are aware of this timing.
10) Can I have pets in my home? Up to three pets (cats or dogs) with a max weight limit of 180 pounds total. You must not have a Doberman, Pitbull, Rottweiler or Mastiff. They do not allow for other animals such as pigs, horses, chickens, goats, etc. There is a $300 per pet fee. This fee is due with the required deposit and is refundable in the event you purchase the home. Otherwise, it is not refundable.
11) Are the monthly rent payments that I make applied to the purchase price of the home? No. If you decide to exercise your Right to Purchase, you must pay the full predetermined price as set forth in the Right to Purchase Agreement.
12) How do I exercise my Right to Purchase? You may notify them at any time that the Lease is in effect that you would like to exercise your Right to Purchase. However, you must provide notice in writing at least 60 days before you want to complete the purchase. Once you notified them that you want to exercise your Right to Purchase – they will contact you to get the process started.
13) Can I buy a home in the middle of a lease term or do I have to wait until the end of the year? You can exercise your Right to Purchase at any time during your Lease. However, you must provide a with written notice of your intent to exercise at least 60 days before you want the sale to close. In addition, the closing date must occur before the end of the applicable Lease term.
For further information. Or to sit down and discuss this rent to own program with Jeff Anderson / RE/MAX Results or one of his team members, please call 612-386-8600.
Please contact The Anderson Team with any questions. We are here to help educate you the process of looking for the right home with our rent to own program