I’m answering a simple question for you today. It’s a question I get often.
The question is, “How do you get the option deposit you collect from a tenant buyer to apply to the down payment they’re going to make in the future?”
If you ask title companies, attorneys, realtors, etc. if you can do this, you’re likely to get a no. People say no to a lot of creative deal types. Just keep asking and you should find someone to work with you.
The optimal answer to the question is that the tenant buyer makes the check out to an escrow company, and a mortgage broker knows a bank to deposit it to and how to present it to the bank.
My contract doesn’t guarantee that the check will apply to the down payment. It does say the tenant buyer will get a credit for it when they close on the house, which leads to the same outcome.
Listen and learn:
- Tell the tenant buyer up front what your assignment fee will be.
- If all else fails, the tenant buyer can make check out to seller and seller pays you the assignment fee.
- The market is becoming favorable to creative deals like lease options.
- Always use local escrow companies.
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