Missed Opportunity?

[tailedger]

We are now in the process of renting out our new legal 2 bdrm basement suite. We had a young man look at it on Wed evening, he liked what he saw and took an application. He returned on Thurs evening with the application all filled out and a certified cheque for 1 months rent+damage deposit+pet deposit. I saw this as a red flag and told him to give us a couple of days to check on his references, job, etc. We called him back on the weekend, told him the place was his and arranged to sign the lease on Mon evening. He called Mon evening and said he found another place.
Did I miss something and was I wrong to see his cheque as a red flag?

 

[Bill Mitsui]

You were doing the right approach. Better miss than sorry.

 

[Matt Crowley]

If it were me, I would take the money and promise to refund the money if the references don't pan out. Make the sale unless there are clearly better candidates in mind.

Part of this is establishing a system for screening tenants and communicating the process to them from the first conversation so they understand exactly how the qualification goes. If it is a personality / gut feel that makes me not want to go any further with an applicant, I will inform them that I need some time to assess the application. But if their employment and household information makes sense and is relatively straightforward, then I conditionally approve applicants. I will always tell a tenant if I believe they are the best fit of everyone I met for the suite and I will advise them to put down money to reserve the suite. I almost never hold a suite without money down.

When a tenant asks what a "qualifying application" looks like it is very simple for me to explain:
1. You hold the job you put on your application which agrees with your references and credit check
2. There are no outstanding debts that would prevent you from affording your monthly rent
3. The references provide a consistent story

Other than that, it is all about matching the right person to the right house. It is more than just budget, it is also lifestyle and I need to consider the lifestyles of other people in the home. I want a peaceful and secure home for everyone and that element is just about fit.

Whether you missed an opportunity or not...I mean who knows what the next person through the door will look like? Next time your systems will be better and you will have a better understanding of what you are looking for. The next prospect is a day or two away. No sweat.

 

[Thomas Beyer]

What market is this ?

November to January are tough to lease. This may have been a 3x$1200 = $3600 mistake (assuming say a $1200/month lease payment)

You could have (and likely should have) taken the $s, given him a receipt, and told him: "You are approved, pending a credit check. Here is the lease, please come back in 2 days after you had a chance to review the lease, with two copies of teh signed lease. I will then sign both, and we each keep a copy". Then in 2 days you could have told him "You are approved" or "I am sorry, we rented to someone else and here is your money back."

Anyway, as stated by Matt, learn from this mistake and improve the process, and next time you're smarter & better prepared.

Merry Christmas & Happy New Year !

 

[Sherilynn]

We use our version of the "Instant Rental Approval" and "Deposit against rent" receipt available here in Critical Forms. The forms stipulate you have 72 hours (or something like that) to check references, etc., and providing everything checks out, the application is approved. They also state if you don't approve the application, the money will be refunded, but if the applicant has lied or been misleading in the application, the deposit is forfeit.

We offer an Instant Approval to every applicant we think is a good fit for the suite. The benefit to the applicant by putting down a deposit is he knows the suite is his providing his references, etc. match our impression of him, so he can stop looking for suites.

Although it isn't common for an applicant to offer all the money up front, it does happen. We had an applicant this summer offer the entire amount in cash while we were at the showing. I told him I didn't need the entire amount until his application was approved, but he insisted. He doesn't like cheques or email transfers, and had the cash with him because he really wanted this location so he came prepared. So far, he's been a great tenant.

 

[DonCampbell]

Agreed!

Use the tools/form available that have been developed for exact situations such as this and with the proper wording and the proper background checks you stay in control.

D

 

[tailedger]

Excellent advice from all who responded, truly appreciated. As a beginner, its tough enough trying to cross all the T's and dot all the I's without the feeling of being pressured by a tenant that I know nothing about. As it turns out, he took a (friends) basement suite for less money including utilities. I know this because he called us back practically begging for our suite. I guess he did not like the partying until 3 am each night with no soundproofing. We had a long conversation and decided (like Sherilynn) he would be a good fit for the suite. We feel confident with our choice but only time will tell.