Leasing a home may seem like a daunting process. People are usually more familiar with the ins and outs of apartment leasing and assume leasing a house will be a snap. To their surprise, there are enough differences in the process that one can become easily discouraged. Familiarization with the process, recognizing the differences and being prepared can make all the difference!
As with any home search, there are variety of sources where you can find houses listed. Many landlords will utilize a realtor to list their home in the Multiple Listings Service (MLS). These transactions are held to the standards of ethics and compliance with fair housing laws, Texas Real Estate Commission rules and realtor code of ethics due to the involvement of a realtor. Some homes are listed in other sites as well such as Zillow, Trulia, Hotpads, Craigslist and so on. Often, these sites will source MLS listings, but be careful — they may not be up to date in their inventory status, and there are known instances of fraudulent listings and scams. Other homes will be listed in social media such as a Facebook garage sale group, LinkedIn or Nextdoor.com. There are also crowd-sourced options where a friend knows of a property that’s coming soon or there’s a home listed on a community message board. And of course, there the homes that simply put a sign in the yard.
With so many sources of information, the pool of options in several markets can seem a bit overwhelming. The criteria you have will naturally narrow the list, including house type, number of bedrooms and bathrooms, fenced yard, pool on property, schools, proximity to employment, amenities and so on. It’s important to be open to as many housing possibilities as possible – the right property in the end can surprise you when you find it.
Before jumping in the car or booting up your laptop to search for houses, it’s important to take the landlord’s perspective into consideration. While you have your selection criteria, the owner of the property does too which can stop the leasing process before it even starts. What may surprise you though is how willing an owner may be to work with you.
A trend in lease management has been to provide the landlord’s criteria selection up front to applicants so they can see how much income is required, credit score range, pet restrictions, criminal background issues and such. For some landlords, these criteria are set in stone, but for others, it is something that can be worked through, particularly for properties that don’t have an application working on them yet. It is important to see what the requirements are and if they aren’t met, to inquire beforehand to see what solutions can be made to save time.
While pets are a part of the family, pet restrictions can put the brakes on a lease. In my experience, if a listing says no to pets, then I will inquire further. Sometimes an owner, particularly if the home has been on the market a little while, may be willing to work with a smaller pet, especially if they can see a photo or meet the animal. Pet breed restrictions can be a real hurtle, particularly when the homeowners insurance has listed breed restrictions. This is something a landlord doesn’t control .There are owners though that work with all sorts of breeds and pet types. Calling to inquire before you see a home will save a lot of time. Service animals and therapy animals are a separate matter entirely.
Timing is another factor landlords take into consideration. In this market, a quicker move-in date is preferable unless the property is currently occupied. Looking at homes several months out can be educational, but often won’t result in finding a home without overlap.
Viewing rental homes can be a lot of fun — you really get a sense of the possibilities. On the one hand, it’s important to remember that renting isn’t ownership — you may not find that Cinderella perfect fit. But, it’s also important to consider local schools, proximity to work and your other decision factors in the excitement. Sometimes a landlord will want to be present during a showing to open the property, so be prepared to put your best foot forward. Properties that are still occupied by the previous tenant, particularly with pets or a younger child, can take additional time to gain access to for showings and may not show quite as well as a vacant home if they are preparing for movers.
The application process for homes is a real divergence from the familiarity of apartment leasing. Each transaction can be entirely different. While a realtor may use the Texas Association of Realtors Lease Application, still another may have an apartment lease application, while another has an online form and another may want their own forms filled out and signed by hand. It’s important to know up front that an application may need to be delivered, printed and scanned, or completed online. Many will require anyone older than 18 living in the home to fill out an application, including adult children, though some will allow married couples to be on one form. The cost for applying will vary as well as the method of payment. Application fees that pull credit and such can vary, sometimes being $30 to $60 or more per applicant. One of the easiest methods of payment for this is PayPal or an online credit card payment, however some still require a cashier’s check or money order in hand at the office before processing an application. Cash and checks are usually not accepted.
In addition to the paper application, a copy of a driver’s license may be required, proof of income such as paystubs or bank statements, photo of pets, rental verifications and so on. It can be extensive, but it is important to provide these items quickly and efficiently to move the application forward and prevent another one from getting ahead of yours.
Most applications provide an opportunity to explain any derogatory items that may come up on a credit report or throughout the background process. It can be helpful to be up front when submitting an application. If the application processor sees an issue they can’t work with, they may be willing to refund the application fee before processing the credit or discuss solutions up front. These solutions vary, but can include double, triple or more the deposit, a guarantor signing for the lease, rent payments paid up front, increasing the rent monies, last month’s rent paid up front or a combination of these solutions.
The amount of deposit listed on sites like the MLS are negotiable depending on a variety of factors often found during the application process and vary widely in the market. These deposits are separate from the last month’s rent and from the pet deposit, which can also vary greatly. Pet deposits listed can represent either all pets or be per pet. Deposits can be refundable or they may not be, depending on the lease terms. Look at listings closely, and if the deposits aren’t listed or you aren’t certain of the total, inquire.
If your lease terms will include prorated rent, inquire as to when that will be due. Sometimes it needs to be paid sooner than you might anticipate, like at the beginning of the lease. Having that budgeted will be helpful.
Properties in high demand or highly desirable price points can receive applications quickly and even have multiple applications. It is important to ask if there are applications on a property before viewing it to see where the property is in the process of being leased. If there is an application, ask how it’s looking? So often an application doesn’t work out, which is an opportunity for another! It’s important to also understand how multiple applications will be processed. Sometimes they are processed one at a time. Even if there is a stronger one behind it, the first one is honored. Other times, multiple applications are processed at once. The hardship is that application fees are costly and in a competitive setting there will always be a loss to someone. There are instances when a deposit will hold the property during the application process, but many agencies have moved away from this practice. I’ve seen a lot of times deposits are due once the application has been approved and the lease is ready to move forward. These funds are typically certified as a cashier’s check or money orders. Some managers will also charge a processing fee which again varies widely and can be somewhat high.
As with any other aspect of leasing a house, the lease itself can vary widely. Sometimes they are two pages written out by the owner, others use the Texas Association of Realtors Lease, some use the apartment lease and so on. It’s best to have any lease in writing and signed. It is important to know that if a lease is used from an organization, such as a TAR Lease, that often those leases require a member of the organization to be a part of the transaction on some level in order for them to be used. Often the landlord, manager, or landlord’s real estate agent will draft the lease and provide it to the tenant for signature. Naturally, terms of the lease can be negotiable.
There is one important portion of the lease that can easily be overlooked, and that’s the notice section to a person close to you in your life in the event something happens to a tenant while in the property. Should a medical emergency come up, a death on the property or some other catastrophic event, it is important the landlord knows who to contact on the tenant’s behalf.
Leasing a home with a plan makes all the difference in this competitive market. This general outline highlights what one may see in a transaction, but there’s just too much to cover for this to be considered exhaustive, particularly when considering costs, deposits, rents and so on. Having a guide such as a realtor who can provide advice, opinion, forms, best practices, and lease navigation and negotiation experience throughout the transaction can be so key.
Happy House Hunting!
To contact Audra Smolinski, visit her website at www.audrasmolinski.com.
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