Home Purchase Program: Agent FAQ

Home Purchase Program

Agent Questions & Answers

Program Overview

What is the ResiAmerica Home Purchase Program?

The ResiAmerica Home Purchase Program is a lease-to-own program designed to help clients achieve homeownership. We assist buyers who can't qualify for a traditional loan. Here's how it works:

Your client submits an application to us including proof of adequate deposit and reliable income
You take client home shopping. They can pick any home on the market that fits our purchase criteria and their approved budget.
You write an offer on the home with us as a CASH BUYER
ResiAmerica purchases the home on your client's behalf
You will receive the full buyer's agent commission
We then lease the home back to your client for 15 years, with an exclusive option to purchase the home outright any time during the lease term.
The client pays a one-time option fee to lock in their price.
During the lease term, a portion of the client's monthly rent goes towards building equity in the home.
The base rent and purchase price are fixed for the entire lease term and will not change.

What are the exact steps from start to finish to get my client in a home?

The steps are described in more detail throughout this FAQ, but the pipeline goes like this:

Application submission and approval
Submit a potential home for review to determine if it meets our purchase criteria
Create an offer and submit it to the listing agent, just like a normal transaction
Typical escrow process including home inspection, repair negotiations, etc
Home closes, you get paid.
Client signs a long-term lease with an exclusive option to buy, pays deposit and moves in

How would the program help my clients?

The ResiAmerica program benefits clients who may not qualify for a traditional mortgage due to various factors, such as inconsistent income, limited credit history, or non-permanent resident status. Some of the key benefits include:

Immediate access to their chosen home: Clients can move into their dream home right away without waiting for a traditional mortgage approval.
Exclusive option to purchase: The program grants clients an exclusive 15-year option to purchase the home at a pre-determined price, providing a clear path to homeownership.
Flexibility and control: Clients have the right to renovate the home to suit their preferences and can even sell their purchase option during the lease period if their circumstances change, giving them a high level of ownership and control.
Rent credit towards purchase: A portion of the client's monthly rent goes towards the purchase price of the home, helping them build equity over time. With the ResiAmerica program, clients enjoy many of the benefits of homeownership from day one while having a structured and achievable plan for purchasing the home outright.

What types of clients would be a good fit for the ResiAmerica program?

The ResiAmerica program is ideal for clients who have stable income but may face challenges qualifying for a traditional mortgage. This could include:

Self-employed individuals
Freelancers or those with variable or seasonal income
Recent immigrants
Those with unique credit situations

The program does not require a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), making it accessible to a wider range of clients. Clients who have sufficient savings for a down payment (at least 10% of the home's purchase price) and can demonstrate the ability to afford the monthly rent payments are good candidates for the program. ResiAmerica focuses on the client's income stability and reliability, even if the income is variable or seasonal, rather than relying solely on traditional credit metrics.

What are the eligibility requirements for clients to participate in the Program?

To be eligible for the ResiAmerica program, clients need to have a stable income to afford the monthly rent payments and a down payment of at least 10% of the home's purchase price. ResiAmerica does not require a specific credit score or US residency status. In other words, no SSN or ITIN Number is required! The program is open to self-employed individuals and those with non-traditional income sources.

How do the monthly payments and overall cost of the ResiAmerica program compare to a traditional mortgage?

Monthly rent payments in the ResiAmerica program are typically slightly higher than a traditional mortgage for highly qualified borrowers. This difference accounts for the unique benefits and flexibility the program offers to clients who might not otherwise qualify for a conventional mortgage. The slightly higher monthly cost is justified by advantages such as immediate move-in, a locked-in purchase price for 15 years, stable base rent, and the freedom to renovate or sell the purchase option.

The overall cost of the ResiAmerica program may be higher than a traditional mortgage due to the higher monthly payments and the lease-to-own structure. However, for clients who may not have other options available, this program provides a valuable opportunity to build equity and achieve homeownership. Ultimately, for clients who might not qualify for a conventional mortgage, the marginally higher monthly cost and overall program cost are a worthwhile investment in their future, providing a path to homeownership that may otherwise be out of reach.

What is the interest rate for your program?

ResiAmerica's home purchase program is a lease with an option to purchase for a fixed price. Since a portion of the monthly rent is set aside as a "rent credit" that can be optionally applied toward the purchase price, it works similarly to a mortgage. However, there is no "interest rate", per se. If you want to think of it like an interest rate, the pricing would be roughly equivalent to 3% higher than whatever the prevalent market interest rate would be for super prime borrowers. For example, if the current rate is 6%, your client's interest rate equivalent would be around 9%. But again, this is a lease with an exclusive long-term option to purchase, *not* a loan.

How much will the monthly payment be?

You can use our payment calculator to get an estimate of monthly payments.

Client Financial Specifics

How is the purchase price of the home determined, and does it change over time?

The purchase price of the home is set when ResiAmerica buys the property. It includes the price paid for the house, a 5% transaction fee, and closing costs. Once the purchase price is determined, it remains fixed for the duration of the lease term, even if home values in the area increase significantly.

What percentage of the client's monthly rent goes towards the purchase price?

While the ResiAmerica program is not a traditional mortgage, it is designed to mimic some aspects of a mortgage. Initially, a small portion of the client's rent, known as the "rent credit," goes towards building equity in the home. This rent credit increases over time. If the client decides not to purchase the home, the accumulated rent credit is refunded to them.

Will the monthly rent ever change over time? What if market rents rise?

The program is set up with three year lease terms. At the end of each lease term, you can walk away and receive any rent credits back. Upon the renewal for the next three years, there will be a 5% rent increase. This is much less than a regular lease which increases 3-5% PER YEAR on average. Also, the rent will increase if property taxes or insurance rates go up. It will increase by the amount that the property taxes and insurance increase only.

Can the client buy the home before the 15-year lease ends, and how?

Yes, the client has the flexibility to purchase the home at any point during the lease term. They can make additional refundable payments over time, which ResiAmerica holds in escrow until the client is ready to buy. Alternatively, the client can obtain a mortgage loan to pay off the pre-determined purchase price.

One important positive thing to note is that if your client decides not to proceed with the home purchase, any money they paid toward the purchase price will be refunded, with the exception of the 10% option fee that was paid to lock in their price.

What happens if the client decides not to buy the home at the end of the lease?

If the client chooses not to purchase the home at the end of the lease term, ResiAmerica will refund any accumulated rent credit and additional payments made towards the purchase price. However, the initial 10% option fee paid by the client to lock in the purchase price is non-refundable.

However, please note that if they do proceed with the purchase, the option fee is applied to the purchase price.

How does the process work if the client wants to sell the home before they fully own it?

If the client decides to sell the home before completing the purchase, they can do so by selling their purchase option. The client can work with you, their agent, to list and market the home. Once a buyer is found, the sale proceeds will be used to pay off the remaining balance owed to ResiAmerica, and any excess funds will be given to the client, minus closing costs and real estate commissions.

It's important to note that the client will need to communicate their intention to sell to ResiAmerica, so we can guide them through the process and ensure a smooth transaction.

Agent Benefits and Involvement

What if a seller doesn't offer a buyer's agent commission?

This is up to you to negotiate. As the agent, you will receive buyer's agent is offered to you. You should probably negotiate with the seller or include a buyer's agent commission in the contract for cases where the seller does not offer a buyer's agent commission. This all depends on the market you are operating in, what is customary, and what the procedure of the local MLS and Realtor assoication is.

How and when do I get paid if my client uses this program?

In short, you get paid as soon as the home your client chooses closes - once we purchase the home from the seller.

When your client uses the ResiAmerica program, you act as the buyer's agent on our behalf. This means you'll receive the full buyer's agent commission that the seller is offering, just like in any other transaction. You'll get paid as soon as the property closes, with your commission coming out of the escrow funds. It's a straightforward process, and you won't have to wait or worry about getting paid.

Do I receive a full commission for closing a sale, or are there any deductions?

Yes! With ResiAmerica, you'll always receive the full buyer's agent commission that the seller is offering. We don't request any rebates or credits from your commission. We believe in fairly compensating agents for their hard work and dedication in helping clients find their dream homes. You can rest assured that you'll be paid in full for your services.

What support does ResiAmerica provide to agents during the transaction process?

When you work with ResiAmerica, you'll be acting as the buyer's agent on our behalf, which means you'll have the typical buyer's agent responsibilities. We'll work closely with you throughout the process. Your role is to be the main point of contact between ResiAmerica and your client, ensuring that your client is satisfied and that the deal closes smoothly. You'll have a dedicated ResiAmerica representative who will be available to answer your questions, provide guidance, and help you navigate any challenges that may arise.

If ResiAmerica is initially buying the house from the seller, who is my client? ResiAmerica or my client?

This is a unique transaction where you, as the agent, are representing both your client (the person who will ultimately buy the home from ResiAmerica) and ResiAmerica (the “buyer” that is purchasing the home from the original seller). It's important to understand the dual nature of this relationship. From a legal perspective, ResiAmerica is the actual buyer in the transaction with the seller. However, your client is the one who chose the home and will eventually purchase it from ResiAmerica. In this sense, you have a responsibility to ensure that your client's needs and preferences are met throughout the process.

Also, please note that ResiAmerica usually brokerage licenses in most states in which we operate. But we empower you to act as the buyer’s agent to receive full commission on the sale.

As a real estate agent, you typically have fiduciary duties to your client, known as the "Duties Owed." These duties include loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting. In this transaction, you'll need to balance these duties between your client and ResiAmerica. You should work closely with your client to help them find a suitable home and ensure that they are satisfied with their choice. At the same time, you'll be communicating with ResiAmerica and representing their interests as the buyer in the transaction with the seller. ResiAmerica recognizes the importance of your role in this process and will support you in balancing your responsibilities to both parties.

We'll work with you to ensure a smooth transaction and a positive outcome for everyone involved. If you have any questions or concerns about navigating this dual relationship, please don't hesitate to reach out to your ResiAmerica representative for guidance.

Getting Clients Started

How can I introduce my clients to the ResiAmerica program?

Introducing your clients to the ResiAmerica program is easy. You can use our convenient invite feature to send them an invitation to apply for the program. Once they receive the invite, they can sign up and complete the application online at their own pace. If you have clients who are less comfortable with technology, don't worry! You can still help them get started with ResiAmerica. Simply reach out to your dedicated agent relationship manager, and they'll guide you through the process of submitting an application on behalf of your client.

What is my role in helping my clients get pre-approved?

Your role in helping your clients get pre-approved is crucial.

First, work with your clients to ensure they complete the application accurately and provide all the necessary information.
Or, if your client is technically challenged, you can submit the application on their behalf.
Double-check the application for any errors or omissions before submitting it.
Once the application is submitted, reach out to your agent relationship manager to discuss your client's specific situation. Share any relevant details about your client's income, credit history, or other factors that may impact their approval. Your agent relationship manager will work with you to determine the best path forward for your client.

What documents and information do my clients need to provide for pre-approval?

To get pre-approved for the ResiAmerica program, your clients will need to provide proof of income and proof of funds for the deposit. Acceptable proof of income can include:

Recent paycheck stubs
Bank statements showing regular income
Tax returns (if self-employed or earning non-traditional income)
Other documentation demonstrating stable income

In most cases, your clients will need to show proof of funds for at least a 10% deposit. This can be in the form of bank statements or other financial documentation showing that your client has the necessary funds available. If you have any questions about the specific documents required for pre-approval, don't hesitate to reach out to your agent relationship manager for guidance.

Home Selection, Submissions, and Offer Process

Can my clients choose any home on the market?

In general, yes. Our program is best suited to standard homes in suburban areas that fit well with the surrounding neighborhood. While we may consider homes in rural areas on a case-by-case basis, these properties could require a larger down payment from your client. It's important to note that we do not finance mobile homes or properties within communities that have rental or age restrictions.

How am I involved in the home selection process?

As the agent, you play a crucial role in helping your client find their ideal home. You should show your client properties that match their preferences and budget. Once you and your client have identified a suitable home, submit the property to ResiAmerica for approval through our online portal - this is called a “Home Submission” within the “Deals” section of the portal.

Who makes the offer, and who is considered the buyer in the transaction?

As the agent, you will make the offer on behalf of ResiAmerica or one of our related entities. In this transaction, ResiAmerica is considered the buyer. You will present (an all cash) offer with a standard inspection period, just as you would for any other buyer.

How are offers made and negotiated through the ResiAmerica program?

You will submit the offer and negotiate on behalf of ResiAmerica. This includes drafting counter offers, repair proposals, amendments, and addendums as necessary. Throughout the negotiation process, you'll work to ensure that the terms of the purchase agreement align with ResiAmerica's guidelines and your client's needs.

Who manages the contract and handles transaction coordination?

As the agent, you will handle some aspects of the transaction coordination, while ResiAmerica will manage others. Think of your role as that of a buyer's agent working with a sophisticated investor. We have our own internal processes, particularly related to repair proposals, but you should still assume the responsibilities of a full-service buyer's agent. This is why you retain the entire buyer's agent commission.

How do contingencies and due diligence periods work?

Contingencies and due diligence periods work similarly to any other real estate contract. We require an inspection period and will complete a home inspection. Based on the inspection results, we will either negotiate repairs with the seller through you or propose a repair credit. Your client should be involved in this process as well. In some cases, we can perform additional repairs before your client takes possession and add the cost of these repairs to their purchase price.

What is my role in the closing process (once the home is under contract with an accepted offer)?

Your role in the closing process is the same as any transaction where you act as the buyer's agent. You'll work with ResiAmerica, your client, and the closing agent to ensure that all necessary documents are signed, funds are transferred, and the transaction closes smoothly.

Other Financial Considerations

Are there any additional costs associated with the program?

Beyond the home's purchase price, a 5% transaction fee is added to the final purchase price, not required upfront. You're also responsible for all closing costs, including title company and attorney fees. After the initial purchase, there are no ongoing fees except for the monthly rent, part of which contributes to a "rent credit" towards eventual homeownership.

What happens to the option fee if the client decides to purchase the home?

The option fee will be applied toward the purchase price if your client decides to purchase the home.

What happens if my client faces financial hardship during the lease?

We will try to work with your client as best as we can, but we will handle missed payments just like we would with a regular tenant. If the rent is not paid, we will have no choice but to file an eviction. However, any rent credit or additional payments made toward the purchase price will be refunded if your client is evicted or cancels the lease.

How can my client make sure the home is paid off at the end of the lease period?

The only way to ensure this is to make additional payments as your client is able to save money. Or, near the end of the lease, your client could sell the house. Or they might qualify with a regular mortgage and can finance the house with a bank loan.

Is there a penalty for terminating the lease early?

No, there is no penalty for early termination. However, please be aware that we will keep the option fee. We will refund your client's rent credits if they terminate the lease early.

Post-Move-In and Lease Period

Who is responsible for routine maintenance and repairs?

Your client responsible for all routine maintenance and repairs on the property. However, if a significant structural issue, not identified during the initial inspection, arises, we will provide support to address it. Day-to-day upkeep, nonetheless, falls under your client's responsibility.

Can my client make significant alterations or additions to the property?

Absolutely. While we'd like to be informed about the changes and review any significant improvements, we're open to your client personalizing the home through renovations or additions. Your client's enhancements are encouraged as long as they align with our guidelines and enhance the property's value.

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