It will depend on your situation, there are a few different tools that we use to help you to own your own home.
1. Rent to own – just like leasing a car or buying a tv on an instalment plan, you take the tv now but you pay for it over a period of time.
2. Seller finance – similar to rent to own, however in this case the title of the property is put into your name straight away.
3. Deposit instalment plan – You can pay off the deposit over a period of time and own the house straight away.
You will need 5% if you want a house straight away. otherwise you will need to go on our savings plan. We will determine the length of time that you need to be on the plan dependant on your earnings and credit history.
You have legal rights to control the property, make improvements, sell the property. In some cases the title to the property will be transferred into your name straight away. In other cases it will take 2 to 3 years.
If you have bad credit it will be quite difficult for you to get finance through most lenders. However with our own dont rent program, we can put you in a house first and give you the time to improve your credit record. Once your credit record is improved we will work with mortgage brokers who may be able to arrange a loan for you in the future.
Your credit history is not the only factor we take into consideration when qualifying you for the process. What is really important is your ability to make monthly payments and your desire to be a homeowner now.
Renting to Own your home has many benefits for the new home owner:
• Getting started in home ownership today
• Lock in your house purchase price today • Try before you buy
• Much lower deposit required
• Pay no stamp duty until at the end of the period
• Build up a larger deposit through ‘rent credits’
• No bank qualifying process
• Less paperwork and less hassle than going through a bank
• Quick move in times – no settlement period. Most homes are available immediately for moving in
• No longer paying ‘dead’ rent money to a landlord.
• Easy entry into the home ownership market.
• Great for self-employed people, tradespeople and business owners without satisfying banks on your proof of income.
• Bad credit reports ok
• Ex-bankrupts, discharged bankrupts and even bankrupt people can Rent To Own their home.
Much less than you would need if you were buying a home through a bank.
Your weekly amount goes towards home ownership rather than into your landlords pocket. A typical Rent To Own home has weekly amounts set at 2-3 times more than ‘only renting’ for the area. They are also similar to what it would be if you owned the home through a bank, so you know you can afford the home.
In most cases the period ranges from 12 to 24 months, after which financing from either the owner of the house or the bank would need to be arranged.
You can buy the property anytime during the agreed period. You do not have to wait until the end.
The price of the property is fixed until the agreed period expires.
The weekly amount is fixed for the duration of the agreed time and will not change.
A standard REIV residential lease agreement needs to be completed, as well as an additional piece of paperwork outlining the Rent To Own details.
“Rent to Own” Agreement = Lease + Option/Purchase Offer
A Lease with an Option to buy means you:
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- Lease (rent) a property by signing a Residential Tenancy Agreement.
- Pay for the right (option) to buy the property by an agreed date at a fixed price. The amount you pay (separately from the lease payments) is called an Option Fee.
- You do not have to buy the property if you change your mind. However, the Option Fee is not refundable.
- Once the Option Fee is paid, the seller MUST sell the property to you at the agreed price at the agreed dateif you wish to buy and if the tenancy agreement has been met.
- The specific details of the tenancy agreement are covered in the Residential Tenancy Agreement, which is the rental contract between you and the owner of the property.
- The specific details of the option agreement are covered in a Deed of Option, which is the contract between you and the owner of the property.
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- You will need to complete an application to take out a lease option on the property. An application fee is payable when the application is lodged.
- Consult a solicitor for an explanation of the Deed of Option to ensure that it represents the agreement reached with the
- Seller for the Option to Purchase the house.
- Sign the Deed of option.
- Sign the Residential Tenancy Agreement.
- View Contract For Sale.
- Complete the periodic payment authority for direct debit of rent and option fee payments from your bank account.
- Pay the Option fee.
- Move into the property, look after the property, pay your rent on time when it’s due.
- At least 3 months prior to the expiry date of the Option, advice the seller that you wish to proceed and buy the property.
- Seek bank or other financing as required. Arrange for a solicitor to handle the purchase on your behalf.
- Purchase the property and stop paying rent.
a) The obligations of a person renting a property are set out in the Residential Tenancy Agreement and include:
i) Paying the rent on time
ii) Keeping the house in good condition and repair
iii) Remaining in control of the house – i.e. cannot leave it vacant for more than 30 days
iv) If the tenancy agreement is breached, the Deed of Option is automatically terminated and Option Fee forfeited
b) The obligation regarding the option to purchase the property are set out in the Deed of Option and include:
i) The obligation to pay the Option Fee on time
ii) The Option Fee is fixed for the duration of the agreement and will not be changed
iii) The obligation to advise the seller of the intention to buy the property and to allow sufficient time for all necessary steps (e.g. arranging a bank loan so that the purchase can be settled on or prior to expiry date.)
If the rent or the Option Fee instalment is not paid within 14 days of the due date, the tenant will be in default. If the payments have not been brought up to date by the time the next payment is due, the seller may terminate the Deed of Option. The tenancy may be terminated according to the conditions in the Residential Tenancy Agreement.
The tenants must be vacate the property and leave it in a neat, tidy and broom swept condition.
Option fee will be part of the deposit toward the equity of the rent-to-own home. It is not refundable if the tenant-buyer did not end up buying the property
Any costs and expenses arising from the default are paid by the purchaser, including any expenses incurred by the seller
Internal Dispute Resolution Scheme
We value, encourage and learn from your feedback. At Own Dont Rent we have an Internal Dispute Resolution Scheme for handling complaints: You may lodge a complaint by phone, fax, mail or email (contact details follow).-
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- The first and most important step in lodging a complaint is to talk to us. We will do our very best to resolve your complaint quickly and efficiently.
- If this is not possible, you should put your complaint in writing so that we can understand the nature of the complaint and how you would like it to be resolved. Written complaints will be responded to immediately by phone and, if this is not possible, a letter of acknowledgement will be sent to you.
- Our staff are trained to assist Clients lodging a complaint in a courteous and helpful manner. They will assist you in lodging a complaint and, if necessary, with completing a Dispute Form.
- If your complaint cannot be resolved immediately, it must be referred to our Disputes Resolution Officer.
- Once all relevant information is received, we will commence a thorough investigation of your complaint within 24 hours and will keep you fully informed throughout the process.
- We will respond to you in writing within 21 days of your initial complaint. If your complaint is not resolved within 45 days, we will notify you that you are entitled to pursue the complaint with the external disputes resolution scheme. We are a member of the Credit Ombudsman Service Limited.
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