QUOTE (markl @ Jan 26 2010, 09:22 AM) Chris,
If that is the case they need to see 3 months of deposits. Since we do not want to put it back in their hands typically we will put it in a lawyer`s trust account for 3 months if necessary to complete the transaction.
We have the tenant work with our mortgage broker to complete so we know before they move forward with the option and can make appropriate arrangements.
Regards
Thanks for your reply Mark, and congratulations on your new book!
To clarify, does this mean that I would or would not be able to spend any of the money received by the tenant buyer for the down payment (either initial deposit or monthly payments)?
For example: Tenant-buyer has option to purchase within 1 year at $200K and I have received a $10K initial deposit, plus $300 each month on top of rent for a total of $13.6K. Tenant-buyer goes for bank financing at the end of 1 year and states they have down payment funds of $13.6K which has already been deposited with the seller (me).
Do I only need to have $300 x 3 months = $900 in the lawyer`s trust account at this point, to show the bank as proof??? Could I have spent all or some of the initial deposit at this point? In this scenario, what exactly would the bank want to see in order to give the tenant-buyer a mortgage?
Thanks again.
If that is the case they need to see 3 months of deposits. Since we do not want to put it back in their hands typically we will put it in a lawyer`s trust account for 3 months if necessary to complete the transaction.
We have the tenant work with our mortgage broker to complete so we know before they move forward with the option and can make appropriate arrangements.
Regards
Thanks for your reply Mark, and congratulations on your new book!
To clarify, does this mean that I would or would not be able to spend any of the money received by the tenant buyer for the down payment (either initial deposit or monthly payments)?
For example: Tenant-buyer has option to purchase within 1 year at $200K and I have received a $10K initial deposit, plus $300 each month on top of rent for a total of $13.6K. Tenant-buyer goes for bank financing at the end of 1 year and states they have down payment funds of $13.6K which has already been deposited with the seller (me).
Do I only need to have $300 x 3 months = $900 in the lawyer`s trust account at this point, to show the bank as proof??? Could I have spent all or some of the initial deposit at this point? In this scenario, what exactly would the bank want to see in order to give the tenant-buyer a mortgage?
Thanks again.