FREQUENTLY ASKED QUESTIONS

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1. How does it work? 

• You pay the seller down in monthly instalments, once the balance is paid off the title can be transferred to you. ​

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2. Are the monthly payments the same throughout the term? 

• Yes! As there is no interest to pay there will be no fluctuations on the monthly amount. 

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3. What if I want to pay the balance off early? 

• You can choose to pay the balance off early, there are no penalties for paying the balance off early. 

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4. Can I use the property while I am paying the instalments? 

• Yes! You can use the property for yourself or rent it out. 

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5. When will the property be mine? 

• Once you have paid off the property the ownership can then be transferred into your name. 

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​6. What happens if I decide not to buy? 

• If you change your mind, you can walk away at any time during the term. 

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7. Can the seller cancel during the term? 

• Only if you fail to comply with the terms of the contract, for example if you stopped paying the seller. 

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8. Who looks after the property during the term?

• It is up to you the buyer to maintain the property. 

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9. Do I need to have a perfect credit score? 

• No! You are not borrowing any money so there is no credit involved. 

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10. Can I buy in a company name? 

• Yes

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11. Can I sell the property before I have paid off the balance? 

• Yes! You can bring a third party buyer at any time during the term.
  Whatever you sell it for above what is owing to the seller will be your profit.

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12. What is the seller dies during the term?

• The solicitor can add in a clause that if the seller dies during the term that the contract can carry on with their estate. 

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13. Is it all legal and above board? 

• Yes of course! We introduce you to solicitors or notaries in jurisdiction of the property who specialise in this type of transaction. 
  They handle the legals and contracts for you. 

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14. What are these agreements called?

• They are known by different names depending on the country or region, and the specific terms of the agreement, here are a few:
  Rent-to-Buy, Rent-to-Own, Lease Purchase Option, Lease Option, Rent with Option to Buy, Instalment Purchase, Hire Purchase Property, Option to Purchase, Owner Financing with a Lease, Rent-to-Buy Scheme, Rental Purchase Agreement. 

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15. Are there any upfront costs?

• Yes, you have agency fees and legal fees which vary from deal to deal.

16. Why do owners sell this way? 

• Many reasons including: 

A: Attracting a Larger Pool of Buyers
Rent-to-buy arrangements can appeal to buyers who might not qualify for traditional financing immediately such as foreign investors or income instability. This expands the potential buyer pool, helping the seller find interested parties more quickly.

B: Higher Overall Sale Price
Sellers can often secure a higher final purchase price with a rent-to-buy agreement. Since the buyer is typically motivated to eventually purchase the property, they may be willing to pay a premium for the opportunity.

C. Generating Income While the Property is On the Market
Instead of leaving the house vacant, the seller can generate rental income while waiting for the buyer to complete the purchase. This is particularly useful in slow markets or when the property has been sitting unsold for some time.

D. Deferred Capital Gains Taxes
In some cases, a rent-to-buy arrangement allows sellers to defer capital gains taxes. Since the property is not sold outright in the initial phase, the seller can delay the gain until the final sale is completed.

E. Mitigating Market Uncertainty

If the market is weak or unstable, a rent-to-buy arrangement allows the seller to lock in a buyer now without having to accept a lower price. This can offer a more stable path to selling, especially if the seller believes market conditions will improve over time.

 

F. Locking in a Buyer

A rent-to-buy agreement allows the seller to "lock in" a buyer who has an option to buy at a future date, reducing the uncertainty of having to market the property further. This is beneficial in areas where demand is unpredictable.

 

G. Creating a Sense of Commitment from the Buyer

In a rent-to-buy situation, the buyer is more likely to maintain and care for the property compared to a traditional renter, since they have a vested interest in eventually owning the home. This can reduce the costs associated with repairs and maintenance for the seller.

 

H. Easier Transition or Timing Flexibility for Seller

If the seller is not in a rush to sell, a rent-to-buy deal offers flexibility by allowing them to receive an income while selling the property over time.