Posted by John Katitus on November 21, 1998 at 19:37:32:
DON’T DO IT!!!
I have made that same mistake twice. No matter how sincere the people are, something unexpected occurs and the money doesn’t show up.
Same with renting.
If they don’t have the money up front, you can be guaranteed they won’t have it in future.
Paying earnest money over 3-4 months - Posted by Greg Mcgahee
Posted by Greg Mcgahee on November 21, 1998 at 16:39:26:
I am new to this site but have learned tons already. I have a lease purchase on a 3br,2ba which is pending. In thinking ahead, I wonder if when I in turn sub-lease it, if it would be a good idea to allow the leassee to pay their earnest money over a short period of time, say 3-4 months. I feel that this would increase the number of people able to lease the house from me. I ask this because I will need to borrow the $2000 I’ll need for earnest money and would like be sure to get it back out of the house when I sub-lease. Any and all comments or suggestions are welcome.
Re: Paying earnest money over 3-4 months - Posted by JohnBoy
Posted by JohnBoy on November 21, 1998 at 21:07:22:
If they don’t have the money up front then chances are they won’t be able to come up with it later especially when they’re taking on a new monthly payment with you.
If they have decent credit they can get a signature loan for up to $5k at the local finance companies. Be sure to verify their income and other monthly obligations to be sure their income could support the additional payments or your asking for trouble.
Also, don’t use the term “earnest money”. Instead use “Non-Refundable Option Consideration”. Earnest money may have to be refunded if they couldn’t get the financing later on. Option money is more of a fee for tying up the property at a pre-set sale price at a future date.