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'RENT TO OWN'
Vendor Financing Program
If your home is not selling the conventional way, consider adding it to our list of Rent To Own properties.
Why sell it this way? After attempts to sell a home has failed, or the home has declined in value to less than what someone owes on it, there is often the need to rent a home to cover the mortgage expenses. When you rent your home to people that have no vested interest in maintaining the home properly, you run the risk of the tenants not looking after the home like a regular owner would. Sometimes, the home will be signifigantly damaged. When a tenant is putting money into an 'ownership' program and has a vested interest in the home, they tend to look after the home, and will see a benefit in keeping it clean & maintained. After all, they will likely end up owning that home in the future! We have been keeping a list of people that are currently looking for homes to purchase in this manner. Often, they are people that have steady jobs and good incomes, but they have not had a chance to put together a full 5% down payment. They still want to buy a home, especially in a market that could experience growth over the next 5 years! Here's how the program works, showing an example: Based on a $350,000 Home in East Hill: You and the Buyer agree to a $350,000 Purchase price. Two agreements are drawn: an contract of Purchase and Sale (with a 2-year completion date), an option to purchase your home on title, and a 2-year fixed-term rental agreement. Here is the payment structure: -Monthly Rental Payments: $1800 ($1500 per month plus $300.00 per month that goes towards Purchase price)
-Deposit required upon sale contract signing: $3600 (A NON-REFUNDABLE DEPOSIT. It's based on a figure representing 2 month's rent, in case of default. This also goes towards the Purchase price in the end. If the Buyer defaults, this money is for any repairs, loss of rent, etc.) -Damage Deposit: $900. This is standard in any 'rental' agreement. You would have to hold this in trust for the tenant upon default & move-out. Interest is accrued. BENEFITS: After 2 years, the Purchaser is bound to fulfill the contract of purchase and sale. By this time, they will likely have all their financing in place, and be able to complete the sale at the adjusted $350,000 price mark. You will have sold your home for the asking price less the money that the tenant has put towards the purchase price. In the above example, the tenant would have put $10,800 towards the purchase price over the 2 years.
The purchase price upon completion would be:
$350,000(original price) MINUS $10,800(equity payments) = $339,200
If they can not get the financing, the fixed term is up, and the Seller can either take back the home or they can re-negotiate a new agreement, with new terms including a market-updated sale price. This is all at the Seller's option. The benefit in all this are simple: BENEFITS| SELLER | BUYER | | Home is rented, expenses are covered | Buyer finds a good, cared-for property | | Good Financial security in the plan | Have a chance to accrue equity in a home | | Home is likely well looked after | Finds good home to call 'their own' | | Security in case of default | 2-years to accrue a deposit/improve credit | As you can see there are reasons why this could work nicely for both parties - A win-win! HOW DO I GET STARTED? 1) Fill out the form at the bottom of this page. We'll get in touch with you after reviewing the information. Then, we'll meet to evaluate your home and it's value on the market with a short walk-through. 2) We add your home to our list of properties for RENT TO OWN, displaying the monthly payment amounts, initial deposit, and how long the term is. This list is made available to them when Buyers call in to us through advertising and the web. 3) We get you in touch with the Buyers, so you can interview them and screen them. We then help you put together a contract package, involving us & legal experts.
LET'S GET THE BALL ROLLING!
Please complete and submit the following RENT TO OWN Home Evaluation form. Then, we can evaluate whether your home is suitable as RENT TO OWN home. The more information given, the more accurate the evaluation. All information you provide is secure and will be kept strictly confidential. We will contact you either via email or phone after we receive it to discuss your home and the RENT TO OWN program. Thank you for your interest in this cutting-edge program! What will it cost me as an Owner/Seller? Let's use the East Hill home above as an example. After introducing the parties and a contract being drawn up, the Seller would pay us the value of one month's rent in compensation ($1800). When the sale completes in 2 years, there is a fee based on the purchase price of '5% on the first $100,000 and 2.5% on the balance' payable to us upon that completion date. In the case of the $350,000 home, this amount would be $11,250.00 plus GST. This is less than the average amount of fees paid for selling a home through the MLS. If the home sale does not complete at the end of the 2-3 year term, there is no further compensation payable, other than the initial amount of $1800.
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