DROdio Real Estate

A client of ours asked:

"How does rent/lease back work- one couple is building their dream house, but it's not ready yet? Would we buy the house outright and then they just pay the regular mortgage?"

Our answer: Yes, when you do a rent-back, you take possession of the house (i.e., settlement) and the sellers become your tenants. The rate they pay is almost always the "PITI", which stands for the "Principal, Interest, Taxes & Insurance" - basically all the costs for you to own the home, usually pro-rated daily. The spirit of the agreement is that it should not cost you anything, nor should you benefit from it.

You can see what a sample rent back agreement looks like here: DROdio - sample rent back agreement.

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Once you ratify a contract, we will work with you to make sure the inspections get done and all contingencies are released. The main job you as a buyer have is to get your loan paperwork done (i.e., send in your paystubs, pick your loan program - 30 year fixed vs. ARM, etc.) Below is a copy of an email we sent a client who had just ratified a contract, so you know what to expect (as always, client names changed for privacy!):

From: "Daniel R. Odio - 202.250.3846" <Daniel@DROdio.com>
Date: July 12, 2007 6:55:48 PM EDT
To: Jack & Jane
Cc: Traci

Subject: Jack, Jane - RATIFIED contract + next steps

Jack, Jane,

CONGRATULATIONS!!! We did it! What a week, eh?

Here's what's going to happen next:

1) You have to send the earnest money check to Traci at National Title (1516 P Street NW, Washington, DC 20005). I'm cc'ing her on this email. You can also call her at 202-466-6206 with questions. National title is going to do the title search and will be the "quarterback" that brings everything together. And Traci is absolutely great, so feel free to ask her any questions. And if Jack won't be in town on Aug 1st, she can help you get a Power of Attorney done so you can sign for him. Traci - I've attached a copy of the ratified contract for this property. It's closing on 8/1.

2) Jack, Jane, your main job right now is to get your loan done. Let me know which lender you want to use and I'll send them a copy of the contract. You should decide which lender you want to use within the next day or two, so we can try to get the appraisal done ASAP.

3) You will also need to get hazard insurance. I'm going to introduce you to Max Olson of Nationwide as a suggested vendor, but the choice is yours.

4) I'll introduce you to Ken Cornwell, the inspector, so we can coordinate a time for the inspection and he can give you pricing.

That's basically it. I am 100% available to answer questions and help you through the process, so call me with any questions!

Regards,

DROdio
____________________________________________________
Daniel Ruben Odio-Paez
Owner and Managing Broker, DROdio Real Estate, Inc.
Registered Securities Representative

Toll-Free, Direct to Me: 1-877-437-6346
Private Fax: 703.997.8872
Email: Daniel@DROdio.com
AIM: DROdio
Web: www.DROdio.com
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1267 N. Van Dorn St, Suite 100, Alexandria, VA 22304 1.800.705.2782

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