by Jeff
13. October 2011
If you’ve ever transacted with a real estate agent in regards to closing a deal with a house then you’d probably know that pricing would have been marked up by a certain percentage compared to the then original price by the owner. Of course not that you will know that anytime sooner, but the fact that the property is managed by an agent goes to show that the price has been marked up. This is what makes vendor financing relatively unique, because it enables the actual seller to market their property with lite and easy terms through rent to own homes.
Let’s try to shed some light on the actual concept behind these two terms. Vendor financing is when a seller of a property decides to market and financing a portion or the whole amount for the property (mortgage etc.) and having it offered as a rental property. This is far easier than having it sold in bulk through the market, because finding a high profiled buyer is difficult especially with the current housing crisis. Vendor financing makes it possible for a seller to sell their property especially if they need the income badly, or simply wants to get rid of the property for personal reasons. Vendor financed homes are of the same great quality as direct sale properties and are often well maintained ones.
Rent to own is the concept behind renting a property and getting a portion of it every payment that you make. After having rented on the property for a few years you may opt to purchase it outright from the owner, with the help of a bank mortgage or housing loan. Being in a rent to own setup, you are tied up to a contract that safeguards you from any sudden market fluctuations, making sure that the interest and repayments remain the same even on sudden spikes in the market value.
These two are usually paired up and depending on the terms of the seller, can be very helpful to people who need a place to stay in fast and want to avoid the typical rental trap the gets them nowhere. With rent to own, you have the flexibility of a rental property with the convenience of your own home. You no longer have to worry about throwing dead money down the drain because a fixed percentage of your repayments is credited to the total value of the property when you purchase it after a year or so. For sellers, gone are the days of having to deal with agents that rip you off of your profit because of the marked up prices and no more royalty fees to pay for having them market your property.
The next time you’re on the lookout for a property where you’d want to live in or simply out on the market for a housing investment, consider vendor financed and rent own homes. Not only are they reasonably priced, but they are practical for anyone who’s wanting a house now and afford to pay later. Discover how easy it is to own your own place today.