RTO Questions & Answers
Buyers & Sellers
Buyers & Sellers Q & A's
1. Will a portion of the monthly rent paid be going towards the purchase of the house?
Yes, about 20% (% will vary depending on agreement) of your monthly rent paid will be going towards the purchase of the house. This is referred to as “RTO Purchasing Credit”. RTO Purchasing Credit will only be applied if monthly rent payment are made on time and in full as agreed to in the lease agreement.
2. Who will be responsible for routine, minor and major maintenance repairs and replacements?
The Buyer/Tenant will be responsible routine, minor and major maintenance repairs and replacements. Most major maintenance items will be covered through the Home Warranty Program.
3. Is it possible the buyer could lose their deposit money if they break the lease or if the property is not purchase in the time frame agreed upon in the contract?
Yes. It is very important that all challenges are eagerly being worked on during the RTO process. The goal is to complete the program successfully so either party doesn't feel that the RTO program didn't benefit them.
4. What does the deposit money go towards?
The deposit money will be like your security deposit money while renting the property. When the tenant is ready to purchase the property, this money will be applied to the closing costs.
5. What will the buyers monthly RTO payment be going towards?
Rent, RTO Savings and Account Management Fee
6. Will the buyers have enough money accumulated through the RTO savings for closing costs at settlement to purchase the RTO property?
Additional money will probably be required. An estimate of the money needed for closing costs will be reviewed with you before the RTO lease agreement is signed. If there would happen to be more money saved then what is needed at closing, the extra money will be returned to the buyer at settlement.
7. What happens if the buyers don’t qualify for a mortgage by the specified deadline in the purchase contract?
It’s the landlord(s)/ seller(s) decision to extend the rental offer or ask buyer(s)/ Tenants(s) to vacate the property. Deposit money could be forfeit or reduced if this would happen.
8. What are benefits to the buyer's for completing the RTO program?
Buyers are able to live in the house they are going to one day own while saving money for closing costs, having a portion of the rent payment foing towards buying down the price of the house, all while improving their credit.
9. How locked in are the buyers if they change their mind about utilizing the program? What will it cost you to get out of the Rent to Own Program?
Deposit money will be lost for breaking the RTO rental lease agreement and for also breaking the contract to purchase the property.
10. Who is responsible for paying the property taxes on the property during the RTO process?
The Seller. Once the tenants purchase the property, the Buyers/Owners will be responsible.
Sellers Q & A's
1. What are the Sellers benefits of the RTO program?
It offers a cash flow on properties that might otherwise just sit waiting to be sold. Also while renting the property, the buyers are responsible for the upkeep of the property.
2. Who will be responsible for managing the property?
Premier Property management group will manage the property at a reduced management fee.
3. What is all included in the management services?
Collecting rent, tracking rent payments and dates, maintaining RTO buyer escrow account, sending late payment notices, paying utility bills, paying mortgage payment, completing home inspections, handling the eviction process (if needed), mailing monthly profit check and statements to owner(s).
4. What if the buyer(s) break the lease agreement or don’t fulfill the purchasing contract as promised? Who keeps the deposit money?
The owner of the property has the right to keep the deposit money. The owner will then compensate the listing agent as agreed to in the listing contract. The tenants will then be charged to bring the property back to pre tenant status, payoff any balance remaining on account. seller and real estate agent as agreed to in listing contract.
5. Who is responsible for paying the property taxes on the property
The Seller. The owner is financial responsible for paying the real estate taxes on the property. If there is a mortgage on the property then the property taxes may be escrowed. If the taxes are not escrowed the property management company will insure they are paid but, the owner will have to reimburse the property management company for making the payment.