by Jeff
17. August 2011
For any, first time home buyer or bankrupt trying to get back on their feet there are a lot of questions regarding getting a home or dwelling of their own. First concern would practically be financial means. Getting a mortgage may not seem as easy at first especially for people with neither no or bad credit history. That’s were Rent to buy homes come, yet even still a lot of people question it’s legitimacy. How do you know which rent to buy homes are legit? Sometimes it takes more than a flashy site, and eye catching offers like no deposit properties to make a statement especially now that some laws in Australia are banning rent to own businesses.
Determining a business and who they is a fact; years in the business, who they’re with or affiliated with and market experience are some of the few. Many people try to look for the history of the people who sell and even more for house selling. Imagine buying off a car from someone you literally don’t know or don’t have a solid reputation, would you even trust their guarantees? Same goes with housing as it costs more than a car and would definitely leave a mark on your pockets. Another way to get around is to ask for feedback from people who’ve dealt with the business before as this brings about personal experiences and would likely give you an idea of who you’re dealing with.
Next thing to look out for, are the requirements and “deals” available for the properties. Sure they may have several in their listings or may even claim no deposit deals only to find out how expensive your repayments are. Deposit would usually be around 10% of the total cost of the property and is usually a must for rent to own properties. Though vendor finance may be offered by the seller of business a 100% waived deposit may not be available all the time. The fact of the matter that you’re looking for a place means spending cash on an investment that you’d benefit from in the long run.
Make things clear on paper. Make sure to clarify everything before signing on the contract, ask for the terms, interest rate, how long before you can take ownership of the deed and more importantly the terms when being late to avoid defaulting on payments. Practically, once you get defaulted on payment or often get late on payments the land owner, business may opt to repossess the property and throw you out resulting in losing your investment. Then again, there’s no stake yet since the legal ownership is still with the owners.
Don’t just take their word for it when determining legitimacy of rent to buy homes. Promises made to you initially may not be the same when the contract comes, or along the way when you get late on repayments. It would be important to avoid circumstances that put you in harms way such as accumulating debt on repayments and to always follow up with the owner or business. Lastly, the sooner you get to purchase the remainder of the mortgage the better for you to close the contract and get the legal rights over to you.