Frequently Asked Questions

I'm not sure how this works. Do I own the home?

You have legal rights to possession and the right to purchase the property. Basically we exchange contracts but do not settle for 25 - 30 years or until the contract is paid out. You have "control" of the property.

How can I buy a home when I have bad credit?

You can't through convensional lenders, but you can with our help. We can set up owner financing or by creative Rent-to-Own situations to help improve you credit over time. We also work with mortgage brokers who may be able to arrange a loan for you.

Do I need to qualify to buy a home?

We are not extremly interested in you past credit status. What is really important to us is your ability to make reasonable monthly payments and your desire to be a homeowner now.

How does Rent To Own work?

Rent to Own a home is just like renting but your weekly amount goes towards home ownership.
Why should I 'Rent To Own' my home?

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 and have it not increase for the entire period.
• 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
• 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.

How much deposit do I need to get started in home ownership?

Much less than you would need if you were buying a home through a bank.

Why is the rent higher on a Rent To Own home?

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.

How much of the rent paid goes towards home ownership?

All of the rent goes towards home ownership. A certain amount comes off the purchase price of the property depending on the house being offered.

How long can I Rent To Own my property from you?

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.

When can I buy the property?

You can buy the property anytime during the agreed period. You dont have to wait until the end.

How much will the property cost?

The price of the property is fixed until the agreed period expires.

Will the weekly amount change during the agreed period?

The weekly amount is fixed for the duration of the agreed time and will not change.

What paperwork is set up for the Rent To Own agreement?

A standard REIV residential lease agreement needs to be completed, as well as an additional piece of paperwork outlining the Rent To Own details.

What does a "Rent to own" mean?

"Rent to Own" Agreement = Lease + Option/Purchase Offer

A Lease with an Option to buy means you:

• 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 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 in the agreed time If 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.

What are the advantages of buying a property of a property with a lease option?

• Only the seller's approval required at this time-No bank or finance approval is required until you decide you want to get finance to buy property.
• Purchase price will not change. The purchase price is fixed when the contract is signed and cannot be changed regardless of any change in the value of the property.
• Short exchange. You don't need to wait on bank or finance approval.
• Try Before You Buy. If you are unsure you really want to buy or are unsure that this is the best house or suburb for you, you can change your mind about buying. You will lose the non-refundable option fee, but you haven't paid out thousands of dollars in the Stamp Duty and the loan repayments.
• Buy at your leisure. The purchaser may buy the house at any time during the term of the contract.
• Establish a good credit rating. If you are unable to currently get bank or other housing finance, proof of regular rent and option fee repayments over several years may help to establish a good credit rating, which may assist in getting their finance after all.

What are the steps I take in order to move into the property and buy it?

• 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.

What are the obligations of the person taking out the lease option?

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 o that the purchase can be settled on or prior to expiry date.)

What if the tenant-buyer defaults?

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.

What happens on termination of the tenancy?

The tenants must be vacate the property and leave it in a neat, tidy and broom swept condition.

What happens to the option fee?

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

Who pays the default costs?

Any costs and expenses arising from the default are paid by the purchaser, including any expenses incurred by the seller

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