Did not vet a tenant-buyer's credit path before signing and now I'm sitting on a dead option
Signed a two-year lease option on a house in Independence, Missouri, $228,000 strike price, $1,450 a month with $200 of that going toward the purchase. Tenant-buyer came in with a $6,000 option fee, steady income, and a story about how her credit was "almost there." I did not ask almost where, and that was my mistake.
Fourteen months in she is nowhere near qualifying. Her score when we signed was 591. It is 588 now. The one collection she needed to resolve has turned into three. Her lender contact, the one she mentioned at signing like he was already on the team, told her in month four that she needed 24 more months of clean history minimum. She told me this in month eleven.
So I am looking at a tenant who is paying, which is something, but the option is going to expire in ten months with zero realistic path to exercise. The $200 monthly credit is sitting in a ledger that will not matter. I will have collected $2,800 in credits that evaporate, kept the $6,000 option fee, and lost the chance to actually sell this thing at a number that made sense in early 2023.
If I had required a written lender assessment at signing, even an informal one-page letter saying here is what she needs and here is the timeline, I would have known in month one that this deal was built on a wish. The option fee covered my downside on paper. It did not cover fourteen months of a property sitting off market at a price I set when rates were different.
I am not going to non-renew her as a tenant because she pays and the house is clean. But the lease option piece is done and I have to decide whether to relist, renegotiate a new strike, or just run it as a straight rental and stop pretending this was ever going to close.
