So You’re Thinking Of Selling Your Home?
Let me tell you how you can come out ahead in a way that lets you skips the real estate agent fees (ie: more money in your pocket), that’s secured (as in, there’s a backup plan for everything – you’re covered during the process), and that can help create an opportunity for another person so they can buy their first home.
I want to introduce you to a model of home ownership called Rent To Own – I’ll give you the quick run down on what it is as well as lay out the benefits for people like yourself who are considering selling your home and are looking at the available options.
What Is Rent To Own?
Essentially, Rent To Own exists to help people who are either building, creating, or repairing their credit rating and who have been turned down by traditional institutions and lenders. Most of the people who apply for Rent To Own are actually hardworking Canadians who may have had their credit destroyed in their younger days, or who have recently moved to Canada and have no existing credit (but enough cash to pay for a down payment), and some have simply never owned a credit card in their life (they have always paid their bills on time but with cash). There are more reasons than you can imagine as to why someone can be turned down for a mortgage, and more times than not has nothing to do with them being ‘irresponsible’. Helping these people is where we come in.
How Can I Benefit From Selling My Home Using Rent To Own?
We look to connect people who are the perfect fit – home sellers that are eager to sell to highly qualified tenant-buyers, so that the process goes smooth and hassle-free. Typically the person in a Rent To Own who would buy your home using this model are just not in a position to ‘buy’ today, however they are taking the required steps so they can become eligible for a mortgage within the next 18-36 months. You’re probably thinking, “Well, that’s great an all, but I want to sell my house now, not wait up to 3 years! I don’t want to be left open to any risks!”
That’s a valid concern, so let me tell you the quick explanation of how the Rent To Own process works. First, a ‘sales price’ is agreed upon prior to any move in – you’re guaranteed to sell your house locked in at agreed upon price. We have a lawyer draft up these contracts so everything is rock-solid and all parties are protected. Now, because the Rent To Own buyer is going to be moving into your property as a renter during the the time of this agreement, we want to make sure that they are also actively saving up a down-payment so they can afford to buy your home at the end of the term. We create what is called a Forced Savings Account – each month the renter pays their “rent” (ie: they pay your mortgage down) as well as placing money into this Forced Savings Account for their deposit. I know keeping up with the technical explanation is a bit if you’re not so familiar with Rent To Own, but the moral of the story is that if anything happens with the tenant that prevents them from buying your house, YOU receive this Forced Savings Account! This is just another way we work to protect our home-sellers, in the rare case anything goes off track.
It’s very rare that this happens because we do a lot of due diligence so that we can match the perfect buyer to your home – someone who is serious about buying your property.
Am I At Risk? How Is It Good For Me?
I’m sure you’re wondering a few things such as “why would I sell my house this way?”, or “if they’re ‘renting’ from me does that mean I have to be a landlord? I just want to sell my place, not be a landlord!” and so on. So to help answer some of those questions I want to share the numerous benefits a home seller like yourself can experience by using Rent To Own.
Here are some of the benefits of selling your home using a Rent To Own strategy:
- You Know The Selling Price Regardless of Market Fluctuation: Part of the Rent To Own process is about locking in a ‘sale price’ of your house before it happens, after all most of these projects last between 18-36 months max! So even if the market goes down, your buyer has agreed to purchase your home from you at a set price – and they are working with us to hit the financial targets required to purchase your home when they are ‘Mortgageable’.
- Large Upfront Deposit: As I mentioned above, we create a Forced Savings Account that acts as a deposit on the sale of your property. The longer they are in your house renting, the larger this deposit becomes. Each month they pay into this account, so to say it once again, if the tenant-buyer is not able to purchase your home within the agreed upon time frame, you get to keep their deposit. We structure our Rent To Own deals this way so that in the rare case a deal falls through you’re not left holding extra costs and still come out ahead. Speaking of any potential issue that are traditionally associated with “renting”…
- Your Renters Are Your Buyers: There are a few benefits that fall under this category. First off, the people doing the Rent To Own deal are “renting” a house that intend to call their “home” – so you’ll find these type of people are the best tenant that anyone could ever ask for. They are not going to be smashing walls, leaving things to rot and go bad because this house is being sold to them! In most cases our applicants actually put more work into sprucing the place up and really making it their own. Another benefit to this model is you no longer have to pay any maintenance costs or utilities! Our applicants are fully responsible for paying their utilities just like they would if they were the owner of the house today.
- Your Mortgage Continues To Get Paid Down: During the 18-36 months our applicants are paying down your mortgage – what this means is you get more money in your pocket once the house is sold at the end of the Rent To Own term. Just look at your mortgage schedule and you can forecast exactly how much extra you will come ahead financially just by having a renter pay down your mortgage before your home sale is completed.
- No Real Estate Agent Fees: You don’t have to deal with finding the perfect real estate agent just to get results. In fact, you don’t even have to use a real estate agent and can forgo that $7000+ average cost! Just like with mortgage pay down, that equals more money in your pocket!
- No Mortgage Penalties (often): When you sell your home the traditional way the sales date and your mortgage renewal date rarely line up. Banks charge penalties for not following the mortgage payment schedule. With Rent To Own we can accurately forecast how long it will take the tenant-buyer to buy your home. This means that if your mortgage renews during the rental term, we can set the renewal to expire at the same time as your home sells. This is just one of the many ways you can be further ahead financially just for selling your home as a rent to own.
We set up Rent To Own arrangements professionally – we have set up over 100 of these deals across Canada. We’ve had a 97% success rate in an industry that has an average of 50% – this is something we pride ourselves on and is a direct result of standing behind the people we match to your house and helping them every step of the way. As you’ve read above, in the unlikely small percentage of a situation where a deal falls through, you as the seller get to keep the failed buyer’s deposit. You can use it to make mortgage payments, fix any damages, and we can get another rent to own buyer for you (with another Forced Savings Account deposit) or you can sell the traditional way.
Rent To Own allows you to come ahead even more financially than the traditional route of selling your property. On top of that you also get to help another hard-working and deserving Canadian achieve their dream of home ownership. With a locked in sale price, an ever-growing and large deposit, a plan to avoid costly fees and penalties, you can rest assured that our team works hard so that all of your bases are covered during your transition.