OfflineI was speaking with a person I know who is in law enforcement and here is what they said about the process of doing thorough background checks. Just food for thought!!!
It is impossible to compete with online pricing whilst doing the job correctly, because they don't.
The online services you refer to do not actually do what they say. It is impossible for them to do so at the prices they quote. Here are some indisputable facts that none of these companies can overcome:
1.There is no accurate nationwide criminal record check available. The law enforcement version called NCIC is not available outside the non-law enforcement community.
2. I have seen online prices for credit and criminal checks at 20.95. Impossible. Here is a real life example, The State of Maine would charge $31.00 for a state wide criminal check for an out of state entity. That is not negotiable. A FCRA compliant credit check with release is going to cost you between 10 and 30 dollars. Those numbers are out of pocket, not including profit to whoever you use to do it. A Maine criminal check and an average costing credit check cost $50.00 out of pocket for anyone in the world. How can any service charge you only $20.95.
Here is another example. A person who has lived in two states in the years prior. Some states do not offer a statewide criminal check, or the one offered is not accurate or up to date. In that case a county to county search must be done. The average person has lived or worked in 3-5 counties over the past 7-10 years. An average county cost is $20-$25, so a criminal check via the courts is going to run about $100.00 out of pocket. Some states will charge a mandatory search fee for each name.
Be careful of the eviction claim. What you are being offered is an eviction that was collected upon in court. It does not include the many, if not majority of "get outta here" evictions that do not show up anywhere except in calling the previous landlords. If you find a gap in residences, dig further.
You could set up accounts and do the work yourself. Get an account with TRW or Equifax, they may charge you $9.99-19.99 per report depending on volume, Get an account with the statewide criminal search for the states you know you might need to search. You can verify name and SS by using one of the 15.95 intellius or tenant screening searches and call the previous landlords yourself. Your cost would be $47.00- $57.00 plus the time. Many sex offender registries are free, just takes time to locate and search. You may be lacking in the Federal criminal and civil which includes bankruptcy, but you would anyway if you paid and outside service.
Remember, there is not a nationwide criminal search and if someone you are considering is offering it, make them identify their sources. What they are selling is usually a publicly available list of department of corrections lists from state to state which is probably 50% accurate because many states do not participate.
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Why it is SO important to call references, prior landlords, neighbors and even the police station where the applicant lives now.
I have a company that gives a list of all the neighbors names and their phone numbers as well; which is another added measure of security when choosing a tenant. Neighbors helped me once to NOT select a tenant I was leaning towards because everything else looked good about them, but there was a neighbor that had a lot of information that helped me change my mind about someone who may have been a very bad tenant to have!
just like credit checks because the underlying system is broken. While it's true that we want to guard ourselves from terrible things happening to us; what criteria allows us to ascertain the truthfulness of the matter. If a fellow named "James Peach" wants to rent-to-own one of my houses, give me a $2500 option fee and pay me $1000 per month (whereby my cost is $800/month), should I base a decision on his 610 FICO score and his poor payment history of paying BP and Capital One? Should I care since I have money up front? If I refuse him and it is found out later that the credit entries are flawed; does the credit bureau pay my lost option fees and rent? The same type of questions could be asked of the criminal search. As pointed out, it is impossible to get an accurate criminal report for the money we are all willing to spend. Therefore, the data we probably receive is flawed and/or incomplete at best. The industry of credit reporting checks and criminal checks are all based upon our innate fear of the unknown. The repositories of the information are not responsible for its content so can't be held accountable.....so do you thing they have a need to make the system better.
I went to lunch with a Wall Street guy last week and we were talking about this subject. He brought up the fact that the forms that need to be filled out are exactly the same as before the housing crisis. My question to him was; "Since that worked out for you so well during the last 5 years because you couldn't predict the number of foreclosures caused by anybody, what makes you thing it will be any different for the next 5 years?" His response was," We don't, but we have to ask for information for our records" He acknowledged that the credit system is broken (7 out of 10 have a major credit reporting flaw; 9 of 10 have a reporting flaw)but since there is nothing else, they just keep using a broken system. You can't even opt out of it.
Anyway, not meaning to be standing on a soapbox, but; even if people have factual problems, why not pay it forward and give them a break? Why not realize that bad things can happen to good people? Why not treat them as you would like to be treated? Why run a real estate business that caters to being scared about everything? We cannot break the ingrained bad cycles of this country if we keep on doing the same old thing. Are there bad people out there? Sure. But I doubt seriously that any credit and/or criminal check will catch them.
PS - I don't mean you shouldn't check for employment, previous landlords and references; but I just think we are catering to an industry that really gives us no value.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
run them on watchdog, local/state police,sex offenders etc-even try google them. Try this on anyone, you'll be suprised what you find.
You have a responsibility to the neighbors of the property.
You can always give a second chance and roll the dice. Some ppl do change.
Do we EVER get what we paid for?
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
I have a respectful question. Why do we have a responsibility to the neighbors? And what type of responsibility do we have? It seems pretty obvious that we want to be "fair", but what does that mean? Assume you have a house that rents for $1,000 in an older neighborhood. Should we rent to college students who might have parties? Can we rent to a sex offender? How about if he offers to pay an extra $500/mo to move in and just be left alone? Do we have a responsibility to rent to a white family to match the neighborhood? Or a family with no children because the average age in the neighborhood is 67?
I recognize that we all want to be viewed as nice, but I think the first responsibility that I have is to myself and my investors (if any) for each home I control. The neighbors are paying my bills and if I pass on a viable candidate for the sake of the neighborhood, do they all chip in to pay my mortgage until a new renter comes along?
Truly, just a friendly question on where the line gets drawn.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Lots to think about.
Being an idealist I get what Mike said and agree whole heartedly, but then I was stopped dead in my tracks by the sense that Bill's comment made. Ahhh it's a coin toss. Can't have it all can ya?
Don't management companies screen tennants for things just like this?
If only I could remember I put a post up on the forums.
Don't management companies screen tennants for things just like this?
Only if you've screened them really well, and you know they call all references, employers, past and present landlords, police stations of addresses they've lived at, and how truthful they were on their application vs what they find out. Many don't; they take the first applicant, run their credit, if its ok, they get their job done. Choosing a tenant is one of the most crucial duties of a property manager; unfortunately, many times they just want to fill the vacancy and don't screen well enough. There are SOME good ones out there, but you do have to screen them better than you screen tenants.
I recognize that we all want to be viewed as nice, but I think the first responsibility that I have is to myself and my investors (if any) for each home I control. The neighbors are paying my bills and if I pass on a viable candidate for the sake of the neighborhood, do they all chip in to pay my mortgage until a new renter comes along?
Truly, just a friendly question on where the line gets drawn.
Bill,
What I'm trying to get across is if you have a property in a family neighborhood and run a check on a potiental tenant and find they are sexual predator,child molestor,etc you should move on-some ppl DO change, but its a roll of the dice. I do believe in second chances.
Tread lightly on discrimination violations.Treat the situation as if your daughter lived next door with your grandchildren.
WHERE do we draw the line??
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools