So you are not ready yet to buy a home and have decided to rent a place, here are 5 questions every new renter should ask.
(Editor’s note: For answers to these typical new renter questions, we turned to local expert and career Realtor, Harry Yazbek, Broker and Branch Vice President for Coldwell Banker Residential Brokerage in Vienna.)
Number 1 – Do I Have to Have a Realtor®?
The short answer is no, but why wouldn’t you want one? A Realtor® can become your best friend and help negotiate terms and conditions you may not even think about. The way it usually works is you sign an Agency agreement with a Realtor® and you become their client. By law and Article one of the Realtor® Code of Ethics, they must represent your best interest and protect your rights. They will negotiate with the landlord or property manager and assist with lease review and other paperwork required.
Key point: Although a Renter’s Agent is generally compensated by the landlord and not the renter, they owe the renter all the loyalty.
Number 2 – What if My Credit History Isn’t Perfect?
Your credit history is, increasingly, a key factor in all areas of your life as a consumer and as a candidate for housing. Some may protest this trend but we must accept reality in that our credit “worthiness” is a major consideration to future employers, credit cards, auto loans, licensing bureaus such as real estate and mortgage loan officers–and, of course, landlords.
There is no set credit score for renters, most landlords select their tenants based on many variables, and credit is just one of them. For example, let’s say someone had great credit then lost his/her job in a layoff. After the job loss, many payments were missed and credit suffered a great deal but a new job was secured a few months later and credit payments have been perfect ever since. To some land lords, this scenario is not as risky as someone who has consistently had bad credit over the years. The two applicants may potentially have the same score but the one who was laid off will likely present a smaller risk to the landlord
Key point: If two candidates are equal in all but their credit ratings, most landlords will take the applicant with the better credit.
Number 3 – How Much is The Rent?
Rent is usually established by current market conditions, comparable rents in the neighborhood, property condition, amenities and term of lease. Generally speaking, the longer the lease term you offer, the more likely you may be able to bargain for a reduced monthly rent. Of course this ties up the property on both ends and if market conditions change, one party will usually get the short end of the stick.
Although rent amount is technically negotiable, one needs to keep in mind what type of market we have at the moment. When homeowners were losing their properties due to foreclosure during the financial meltdown, the rental market was very hot, in favor of landlords. Basic supply and demand kicked in, the majority of those former homeowners entered the rental market and demand exceeded supply, hence rents went up drastically.
Key point: Know the market and negotiate terms accordingly.
Number 4 – Who Pays for Normal Wear and Tear and Damage?
Answer is very simple, read your lease and negotiate it. Generally speaking, normal wear and tear is not the tenant’s responsibility but the cost to repair tenant damage is and will be deducted from the security deposit. When you first move into the property, conduct a “walk-thru” inspection where you can detail and take photos of any existing damage to the place, same as you would with a rental car.
Key point: Careful inspections–with photos–mean you will not have any existing damage to a property counted against your deposit.
Number 5 – What happens if I break the lease?
A lot of bad things can happen if you break the lease, depending on how nice you were to your landlord and how pragmatic he or she happens to be. First thing the landlord can do is keep the deposit and sue for the remaining balance of the lease. Or, the landlord can find another renter to take over and sue for the amount of time the property was vacant during the transition. This will most likely have a negative impact on the renter’s credit history. I would recommend you seek counsel before attempting to break a lease. In many cases landlords are very understanding, and a transition can be done amicably (but with the cost of process being paid for by the tenant). This will probably include rental payments while the home is vacant, utility costs and yard maintenance during that period of time, as well as any Realtor® leasing fees incurred by the homeowner.
Key point: Communicate with your landlord if you must break your lease–and be prepared to bear the costs of vacancy.
To learn more answers to common new tenant questions visit our Tenant FAQ page.