What are the proper steps that should be taken in qualifying a Tenant/Buyer for a lease option deal? I would assume credit checks and checking references would be important. What steps do you typically take when qualifying a Tenant/Buyer for a lease option deal?
Thanks for the help.
The answer to this question will depend a lot on the amount of the option fee. You, in effect, are doing the same thing as a mortgage company, weighing risk vs. reward. You look at credit, job history, earnings, and amount of downpayment. Obviously, if you are getting a 5% option fee, the others factors will fade in importance. Consquently, a recently divorced person who had perfect credit up until an expensive divorce could get in for less.
I may be taking you question further than needed, but personally, I check:
-Credit
-Employment
-Earnings
If anything is terribly wrong, I expect a reasonable explaination.
Good Luck…