I was not successful in selling my previous home for $148,000 in summer last year, then my son moved in and back out (he also owns another house to which he moved back... divorce affair.)

I found a tenant as of May 1, 2007. She has good references but does not have sufficient credit to buy the property outright (non-paying ex-husband).

The rent of $1100 will amply pay my mortgage and leave money for later repairs. She is presently cash-poor, having paid for the move to Missouri. The rental appears to be consistent with prices in the neighborhood (my insurance agent-friend owns a few rental houses in the neighborhood, and so I had advice for a point of reference.)

Instead of a deposit, I agreed that the lessor do inside painting, which would have cost me about as much as a one-month deposit.

We signed a "Preliminary Lease Agreement" (standard agreement except I added "Preliminary" because it was just a draft and is perhaps to be renegotiated (see below). The cost of the painting will not be refundable at the end of the lease.

I allowed her to move in without a deposit, in fact I am allowing her "to be my guest" from April 20 to May 1, when her move here is completed and her furniture arrives.

I checked her out, and she has been paying her rent promptly in Virginia where she previously lived. I also verified her income based on bank deposit slips from her work as a freelance web designer... I know, that's all a bit naïve and not very scientific but that's what I have done so far but it's not etched in stone since it is still in the form of the preliminary agreement.

She has 2 low-teenage kids, 2 dogs, 1 cat.

She is interested in owning the house but does not have sufficient bank credit (divorced husband thing). She would like an "owner finance" type agreement if possible. I would like to get rid of the house because I have been using my own maintenance man to keep up the premises for more than a year, which means I had to inspect, write lists, a pain, etc... Also a bit of nostalgia, because I liked my old house better than the brand new one into which I moved.

I found that perhaps a "contract for deed" would be a better deal for me. But we have already agreed on the rental price without any deposit.

I do intend to see an attorney eventually to get him/her to look the agreement over before signing the final copy (whatever the arrangement) but would like some advice in advance, if possible, on what, in the existing situation, would be the best deal for me.

Even if I told her that simply want to see how she does and then, in 6 months, we can discuss a type of ownership acquisition arrangement (but then the same questions will come back up)?

I presently don't have a real estate attorney but intend to get one to look over the agreement draft (which I intend to download from the Internet and supplement as needed... I can read and understand legal language, I frequently translate contracts, patents, etc. for lawfirms, so it's a matter of last touches, and, of course, I've never sold or leased out a house.)

Or would it be more intelligent to approach the title company with which I dealt in buying my present residence and see if they will work with me?

Can anyone provide me some sound advice, please.

Thank you in advance.

Doris

Well I would advice that you are now running a charity, and she may well expect more latter, and I hope you actually get a check on May 1.

Next by not getting a deposit, you have little protection from dog or cat damage, teenager damage and her not being able to pay rent in 4 months.

So my best advice is not to do anything for at least 6 months, not have her move in until you have a final binding lease in place.
Next study and learn all of the eviction laws in your state to know your rights.

I would not do a contact for deed with out a large enough down payment, and most certanly not do a owner finace without a good down payment.
On the contract of deed if it is written right it is much easier to kick them out if you have to. But you really need to sit down with an attorney and go over the details of both, But honestly You need to be careful being too nice at least until they have rented from you for a while and know them better. Then if you want to work out some charity loan for them, that is your risk to do.

Hello:

Just to add to what the Padre said. I know what you were thinking when you wrote the word "preliminery", but that's not a legal term. If you both signed it, it's binding no matter what you wrote!!

Given that your house is probably the most expensive investment you ever made, I wouldn't rely on my ability to do my own lawyering at all.

excon

Quote:

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Originally Posted by Fr_Chuck

Well I would advice that you are now running a charity, and she may well expect more latter, and I hope you actually get a check on May 1.

Next by not getting a deposit, you have little protection from dog or cat damage, teenager damage and her not being able to pay rent in 4 months.

so my best advice is not to do anything for at least 6 months, not have her move in untill you have a final binding lease in place.
Next study and learn all of the eviction laws in your state to know your rights.

I would not do a contact for deed with out a large enough down payment, and most certanly not do a owner finace without a good down payment.
On the contract of deed if it is written right it is much easier to kick them out if you have to. But you really need to sit down with an attorney and go over the details of both, But honestly You need to be careful being too nice at least untill they have rented from you for a while and know them better. Then if you want to work out some charity loan for them, that is your risk to do.

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Thank you for your advice. In retrospect, I agree, I was probably too nice. I'll just see what they'll do as renters.
Doris

Quote:

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Originally Posted by excon

Hello:

Just to add to what the Padre said. I know what you were thinking when you wrote the word "preliminery", but that's not a legal term. If you both signed it, it's binding no matter what you wrote!!!

Given that your house is probably the most expensive investment you ever made, I wouldn't rely on my ability to do my own lawyering at all.

excon

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I don't know whether that's good or bad that the "Preliminary Agreement" is binding. I guess I do want it to be binding for the lease, and so I can only hope that the tenant comes up with the money tomorrow. I do intend to get an attorney to look over the lease. Thank you for your comments.
Doris