Automated income verification from The Closing Docs provides deep insight into any applicant’s ability to pay rent by revealing their net income. Here are some best practices to support getting the best results, quickly.
Fair Housing best practices
Our recommendation to remain in compliance with FHA is that verification of income (VOI) is requested of each applicant, including co-applicants, cosigners, and guarantors.
Here is sample language used by many of our customers which yields ~99% compliance:
Please expect an income verification request via both an email and a text message from The Closing Docs, a fully encrypted and secure service, which may eliminate the need for you to submit either pay stubs or bank statements.”
We recommend you check with your designated broker and probably legal counsel to ensure you are conveying appropriate messaging to all applicants related to automating income verification.
Prepare your applicants
Historically, applicants are stuck with tracking down their paystubs and then sending them to you via upload, which wastes valuable time for everyone involved. To help them move swiftly, and to accelerate your processes, let them know that you confirm applicant income using a third-party verification service called The Closing Docs.
If your applicant objects
We recommend your first choice is guiding them to our support team via the live chat. We’re happy to address applicant questions with our service (Monday through Sunday, 8AM to 4PM PST).
If they want to know why you elected to work with us, please ensure they understand The Closing Docs cannot access their banking operations and can only read and report deposit history. Furthermore, they can only read it once. This is both safer and more secure than other companies who ask for or require your SSN, account numbers, and paystubs. Our process also eliminates sharing uploaded information, an approach that opens up a number of security vulnerabilities for the applicant (as well as the property manager).
Adding new employees in your office or firm
When adding one of your peers to The Closing Docs please remember new users need to be invited into your organization using the “Invite A User” button from within the “Users” page in the portal! If they create a new account through the sign-up page it will create a new organization for them alone.
Rely on us for support (Monday through Sunday, 8AM to 4PM PST)
Whenever an applicant objects or has questions, please direct them to our live chat button found at the bottom right-hand corner via their screening link (the link sent to them via email or text message). From there, our support team is ready to assist them, 7-days a week between 8am and 4pm Pacific-time. If they need assistance outside those hours, a support ticket is created and we generally have it resolved inside of 2-hours.
How to interpret The Closing Docs report: Green vs. Red
Our income verification report displays a green line when the NET recurring income is equal to or above your net rent-to-income multiplier.
Our income verification report displays a red line when the recurring income does not meet your net rent-to-income multiplier. It does not represent a recommendation to decline an applicant based on income. The red line suggests you consider the non-recurring income information available in the report.
Save The Closing Docs report
For consistency, be sure to save The Closing Docs report to your computer or within your property management software!
The report will automatically be removed from our servers after 14 days. You will receive a reminder notification 3 days beforehand and again the day it expires and has been removed.
Some property management software solutions do this automatically. Check with your IT team.
If you are leveraging one of our browser extensions to enhance your user experience within whichever property management software you are using, security requirements at The Closing Docs will prompt you to re-enter your password every two weeks. Click here for help.
Some integrated property management solutions manage security directly. Check with your IT team if you are unsure.
Should I confirm the income of existing tenants prior to offering a renewal?
A lot can change over 12 months, so before you offer a renewal, it’s a smart business practice to re-confirm existing tenants’ capacity to pay rent going forward.
Integrate our income verification into your property management software
If you use property management software, we have built many integrations that allow you to send requests and view automated income verification reports directly from within your property management software. Integrations like these prevent toggling between tabs, and keep you relying on the tools you love.
Request by text and email to capture more applicants
Although many people have an email address, not everybody uses them. You can include the applicant’s phone number when creating a screening request to send an invite via text message. They will receive a link inviting them to complete the automated income verification.
Not only are text messages more likely to get quickly noticed, but your applicants can complete the income verification screening directly from their phones.
Add all roommates to the same screening request for a holistic picture of their income
When you have multiple applicants applying as roommates, or will include co-signers in the application cycle, it can be time consuming and convoluted to determine the combined household’s ability to pay the total rent. Including more than one applicant in a screening request will result in a combined income report for the entire household, while also showing individual income detail for each party.
Give applicants a deadline
If your applicants know that the income verification needs to be done within 24 hours, they are much more likely to complete the screening request immediately. Make sure whatever deadline you request of your rental applicants is in-line with your state laws on applications.
Send them a reminder
If your applicant has been unresponsive or cannot find the income verification screening request, you can resend the notification to them. If you initially attached the applicant’s phone number, this will also resend the text message.