Home Selling in 76137>Question Details

Mary, Both Buyer and Seller in 76130

Want to put my house for sale w/ a lease/ purchase option. Seems it's almost illegal in TX. Don't want to cheat anyone, just sell house.

Asked by Mary, 76130 Sun Nov 28, 2010

Any way? House not for sale yet. I don't need immediate cash. Houses around here aren't selling but they're building new apartments. Seems like it would be a great way to get a buyer in who can't come up with a down payment. I'd be willing to do a 100% rent credit towards down payment just to move house.

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Dp2’s answer
I'm also an investor who specializes in creative financing (ie lease-options, seller financing, etc). I know that Darin is legitimate and knows what he's talking about. Keep in mind that many attorneys have no clue of what creative financing is; the ones that do tend to be real-estate and/or title attorneys. (A few attorneys who specialize in corporate or contract law also might have some specialized knowledge in this area.) Before having an attorney to review any contracts with seller financing, have him/her discuss his/her experience with them first, and get some references.

Gaylene Rogers Lonergan is a real-estate attorney, who's based in DFW and is heavily involved with the investment community, and who knows her stuff too. She also teaches classes from time to time on creative financing and notes (the other side of creative financing).

The law was created, because several greedy sellers basically sold properties with terms that they knew most of their buyers eventually wouldn't be able to fulfill. That enabled them to resale the same house to multiple buyers. The intent of the law was prevent those greedy sellers from continuing to prey upon those buyers; however, as Darin mentioned earlier, the legislators went from one extreme to another.
1 vote Thank Flag Link Sun Nov 28, 2010
Hey there Mary....

I'm glad I caught your question early enough before you got a Realtor involved or started having an Attorney draw up some paperwork for you.

My associate and I specifically do Lease-to-Own deals on single family houses. My program is concentrated in Austin, TX & Savannah, GA.......He is actually in Ft. Worth, TX.

Here's the gist of the history for Texas lease options without going into a total dissertation:

(((Deep breath)))

Before 2005, there were problems about tenacity & conveyance. There were (mostly near the southern part of Texas) sellers taking advantage of tenant/buyers in a couple of different ways. Then ACORN (everyone's "favorite" community organization) got involved. This prompted Representative Hutton of Houston & Representative Lucio of Brownsville to draft up legislation to ban or limit lease options in Texas. Of course when you have legislators drafting up bills, of which they know very little, it's a mess. THEN....thankfully Royce West introduced Amendments to the bill that allowed it to be workable. Then Governor Perry signed it into law.

(((whew.....another deep breath)))

Basically it says that the payments must be current from the seller, they must provide mortgage information and other things like the late fees can't exceed 8% and that they can't withhold rent credits for late payments. The law also states that mortgage companies must let you do a lease option on properties. And, to my knowledge, the TREC (Texas Real Estate Commission) has not come up with specific documentation for Realtors to do lease purchases yet.

Now...that being said, my Associate (John Jackson) has been doing lease options for about 6 years in Ft.Worth VERY SUCCESSFULLY. He has about an 80% success rate for the tenant/buyers actually purchasing the house because we are proactive in helping them improve their credit while they are leasing the house with our mortgage lender & credit improvement specialist. Once again, his name is John Jackson and his website is http://www.Leasingtobuy.com. With our Lease Purchase program, these are the FREE services you get:

You get your full asking price....YOU DON'T PAY A COMMISSION, EVER!....You can keep marketing your home while we market the lease purchase....You'll have a qualified Tenant/Buyer within 45 days....And you don’t worry about repairs. The tenant/buyers pay for the repairs.

His company, Leasing to Buy, is the largest lease purchase company in Texas, and is the ONLY one that's a Accredited Member of the BBB & a member of the Chamber of Commerce. He has a list of over 1000 tenant/buyers who have contacted him, at one point or another, asking about lease-to-own houses in Ft. Worth. And we do give some rent credits to the tenant/buyers as well.

If you want to shoot me an email or call me I'd be glad to go over our lease purchase program with you or you can contact John directly. If you go straight to John, let him know that I gave you a little info on his program in Ft. Worth and say hello for me. :)

Best wishes & Laus Deo,

Darin Ray
Lease-to-Own Professional
Independent Consultant
1 vote Thank Flag Link Sun Nov 28, 2010
I represent many families who are interested in lease purchase AND property owners. Certain ways to author lease agreement where withing State statues.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
1 vote Thank Flag Link Sun Nov 28, 2010
My recommendation is that you ready the following info. It is very difficult to do a lease option when you understand the included info. Copy and paste the following link in your browser and read it carefully. http://www.jeremybrandt.com/texas-lease-option-law-hb1823-update/ . Bryan Dunklin is in dallas and is a highly respected Real Estate attorney and speaks on the issues frequently.

You are much better off to owner finance than to lease option your home unless you own the home free and clear.

Hope this helps.


Tim
http://www.IBuyNorthTexasHomes.com

Yes, We Do Buy Houses!
1 vote Thank Flag Link Sun Nov 28, 2010
Good thing about my company, we have hundreds of home buyers that are looking to lease a home ASAP, have credit issues but make good money and have savings for a down payment if needed.

http://www.thelendersnetwork.com
0 votes Thank Flag Link Sun Apr 28, 2013
HI Mary,
You just have to structure the deal a certain way. Too many people, both buyers and sellers have had bad experiences.
I can walk you through the process.
http://lloydmartinrealestate.com/index.php/our-listing-prese…
Look forward to b being of service.
Lloyd
817-471-0221
0 votes Thank Flag Link Sun Apr 7, 2013
IMHO, the proper way to structure any creative financing deal as one of the primaries is the following: 1) either I or my agent will negotiate the terms with the other party, 2) I'll have my attorney review all of the legal work, 3) I'll have my preferred title company handle the escrow, 4) I'll have my attorney or mortgage broker to qualify a buyer (when I'm selling [to ensure that I comply with the T-SAFE Act--at least on deals in TX]), 5) I'll have my title company's attorney or my own attorney to create any note(s) (when selling), and 6) I'll close the transaction with my title company's, my attorney's, and my agent's (if applicable) blessings.

Most wise investors, who also specialize in doing deals with creative financing (Darin included), do something similar--albeit with perhaps a few minor variations. Do I know some investors who do all of this without using attorneys? Yes, I do, and that works fine for them. I've already factored in all of these costs into my business model, so that they're already priced into the deal on the buy-side.

One of my mentors said, "Investing is a team sport." Although i could do the 1 person band thing, I prefer to not do that. I prefer to focus on what I do best (aka my core business activities), and outsource the rest. This business model works well for me in IT, and it also works well for me in REI. I know plenty of other investors who take a similar approach.
0 votes Thank Flag Link Wed Dec 1, 2010
Thank you all again for your replies and discussion on this subject. I may be contacting some of you in the next month or so, but it looks like I still need to do some research.
0 votes Thank Flag Link Tue Nov 30, 2010
Darin, Best of luck with your venture. I am sure you have covered the fact that you must be licensed in Tx. to provide such services as renting, leasing, or selling property. Of course that is unless you are a principal in which case you are the buyer or seller and representing yourself in the transaction.

I was trained by the man that founded Homevestors "We Buy Ugly Houses" and was in the picture years before it was franchised. So I have a long history of creative financing, and creating a product to fit the market. I also saw undisclosed wraps etc. send agents to jail and notes being called due when creative financing wizards thought they had all the bases covered. So I trust you have figured out how to avoid these pitfalls for your sake and the people you are helping. Again best of luck and probably this is not the fourm to discuss this anymore.
Web Reference: http://debbiescrimshire.com
0 votes Thank Flag Link Mon Nov 29, 2010
Debbie....

The actual line is Thou doth protest too much. :) And yes...sometimes I do. But if I don't defend lease purchases against all the cold water pouring/Negative Nelly's out there, negative and incorrect information will begin to perpetuate itself. May I refer to the quote...."Not to speak is to speak. Not to act is to act."

I'm certainly glad to hear that you fulfilled your fiduciary responsibility to your client. I wish more Agents would follow your lead and also have the years of experience under their belts to boot.

I would love to give the intimate details of our lease purchase program but as they say in the 2008 movie Kung Fu Panda...."I don't know if you're ready to be entrusted with the secret ingredient of our secret ingredient soup." :) Just kidding. It just comes from studying the Amendments to HB1823, knowing which sections do and do not apply and then correlating it to our specific business model.

Darin
0 votes Thank Flag Link Mon Nov 29, 2010
Perhaps Rent to Own protests too much. After 30+ years in the business as a full time realtor and investor myself I pride myself for remembering past times in order to know how to conduct my business in the present. After all case law is about what happened in the past usually is the beginning of laws being written.
FYI The seller of the home I talked about had been my client when I sold him the house. I could not sell it for him 4 months later when his life took a turn and he could not keep it. I advised him to lease it until he could sell and that is how he ran into the "lease to own deal" when his house was foreclosed upon. He thought he did not own it anymore. I wasn't asked my opinion when he entered into that agreement. In fact I thought he took my advice and just leased it. I would love to hear your program and how it correlates to the law.
Web Reference: http://debbiescrimshire.com
0 votes Thank Flag Link Mon Nov 29, 2010
Scheesch....Let me recap the last post:

Not to sound harsh but.....

"I HAVEN'T studied all the angles in years BUT....."
"....we USED TO encounter..."
"...when you agree to give them credit for down payment...." = That's why it's called Option Consideration.
"We USED TO have some loan companies in the 80's..." = 3 DECADES AGO
"...documentation was very strict..." = are we still talking about the 1980's?
"...anything over that amound paid to the landlord could be used as credit..." = Sellers concessions (using Rent Credits) can't exceed 3% at close for most financing.
"...and I DON'T KNOW if this can be done at this time."
"I have been TOLD there are a bunch of scams out there..."
"One of my clients decided to use one of those companies..." = Name and Location of the company? And if he was your CLIENT and not a customer, then didn't you have a fiduciary responsibility to counsel him as to any material risks?

and the only thing I actually agree with..........

"I urge you not to do this without a reputable real estate attorney." = We've had Attorney's put together our paperwork and contracts as well as having a letter from the TREC that says what WE DO is perfectly fine. And thus, I can only speak for myself and John. You can take our paperwork to your Attorney to look over if you like (we've encouraged the hundreds of people in the program to do that and it's actually IN OUR CONTRACTS THAT YOU DO SO), but just remember..... Even reputable Attorneys have "looked over" paperwork and tried to amend it only to have their "additions" or "amendments" be completely ILLEGAL because they have not studied House Bill 1823. :)


Darin Ray
Lease-to-Own Professional
Independent Consultant
0 votes Thank Flag Link Sun Nov 28, 2010
I haven't studied all the angles in years but we are told at all mandatory continuing education classes to get an attorney to draw lease purchase agreements because there are so many issues that could present themselves at a later date. A couple of issues we used to encounter involved the wording on the due on sale clause in your current note. Often there is wording that would allow the mortgage company to call your note due if you did a lease purchase. Another problem can occur when you agree to give them credit for down payment and then the mortgage company they are using to buy the house at a later date does not allow that. We used to have some loan companies in the 80's that allowed only the money paid in rents that was over and above what the rental comps were at the time. For example if a comparable home leased for 1000 per mo then anything over that amound paid to the landlord could be used as credit. Of course documentation was very strict and I don't know if this can be done at this time.
I have been told there are a bunch of scams out there causing people to lose their homes. One of my clients decided to use one of those companies and actually went to a title company and signed some papers. Subsequently he later found out the house was foreclosed upon and it was still in his name. Now he has a foreclosure on his record. I urge you not to do this without a reputable real estate attorney. Feel free to call me 817 980-1047
Web Reference: http://debbiescrimshire.com
0 votes Thank Flag Link Sun Nov 28, 2010
Mary,
Thanks for the clarification, however as most Realtors will tell you, Zillow is not typically a reliable source. Our local MLS is the most reliable. If you would like to send me the particulars of your home, I would be happy to give you days on market for your particular home amenities, as well as how many are on the market. This is a free service, with no obligation on your part. No pressure from me, I just want you to have the proper information so you can make the best decision for your situation. Thanks again!

Jackie
0 votes Thank Flag Link Sun Nov 28, 2010
Thank you all for your speedy replies. Thank you Tim Cook I have seen the link you sent me before but have not yet read all the detailed commentary linked to from that page. It does seem a shame that when the TX legislature passed the 2005 law they couldn't have targeted investors who were really taking advantage of low income potential owners and made an exception for owners trying to sell their house, but I need to study this further. I wonder how much good it would do to contact my state rep. Vicki Truitt about this law - it would probably take too long to get anything done to help me but the law does seem to be overkill, especially in a market like this with so many people trying to sell and so many others who can't afford a down payment.

Jackie Rankin the reason I think homes aren't selling in this zip code is because when I check Zillow for recent sales I see 12 recent sales (last week this was 2 -one a $120K house sold for $60K) and 448 for sale.

As further info I still owe about $11K on this house but could pay this off tomorrow if necessary. I probably won't be putting it on the market until January.
0 votes Thank Flag Link Sun Nov 28, 2010
Mary,
The good attorneys I know say don't lease/purchase or lease to own. You can put the home up for lease or sale at the same time. They need not be mutally exclusive. The problem we most often see is that the people who are the potential buyers, never can get qualified. Also many lenders won't allow the rent credit. You might check with your local bank to see if they would allow.
There are a couple of options. If you can get it rented you can then sell to an investor who wants turnkey properties. Rent it for your own long term income, or price it to sell.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Sun Nov 28, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
It's not illegal, but you should get some help.
Here is contact info for a colleague of mine, he is a professional in this field.
Ben Nelson
DFW Notes
bnelson@email.com
0 votes Thank Flag Link Sun Nov 28, 2010
Mary,
Why do you think that homes aren't selling in the 76137 zip code? Overall statistics for all of 76137 (in the past 6 months) is an average of 84 days on the market. That is less than 3 months on the market. Those statistics can vary based on your home size, condition, and age, but the 84 days take into consideration every home in 76137 in the past 6 months. If you'd like more information on your homes market value, etc. just let me know. I'd be happy to do a free analysis and let you know where you stand in the market. Thanks and I wish you much success!!

Jackie Rankin
Tru Value Realty
truvaluerealty@gmail.com
0 votes Thank Flag Link Sun Nov 28, 2010
There are options that are legal and can get you the outcome you want which is a a house to move. We specialize in 76137 area and can answer any questions regarding leasing with an option to purchase. Give us a call today 817-881-4886 or email info@soldteam.net.
Web Reference: http://www.soldteam.net
0 votes Thank Flag Link Sun Nov 28, 2010
If you own the house outright and Owner Finance is in now way illegal... Even if you have a note on the home you can talk to the lender sometimes and get authorization to owner finance the house to someone else. Of course you are still on the hook with the original lender but it can be done..

Dont hesitate to call with more questions.
0 votes Thank Flag Link Sun Nov 28, 2010
Give mean call and we can talk about the options. There is owner financing and lease options avaliable.... It just potentially can cause issues. However a Real estate attorney can be a help.
Web Reference: http://Justinhenryhomes.com
0 votes Thank Flag Link Sun Nov 28, 2010
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