Unlock the Power of Digital Signature Legitimateness for Rent to Own Agreement in Australia

How to eSign a document: digital signature legitimateness for Rent to Own Agreement in Australia

So today we're going to talk about renting to own and a couple things to watch out for so as a lender I see these go sideways all the time I mean personally would I enter into a rent to own agreement no no I wouldn't and here's why so a lot of times the way it gets presented to you is ah hey your credit's not good enough right now but like if you rent the house then you can rent to own it and like your payments will go towards your down payment you know it sounds really good it sounds like you're going to become a homeowner you just have to you know rent and do your time there's so many ways this can go wrong okay now the first thing is let's pretend it's a legitimate seller because that's the thing you have to watch out for as well there are people who try to defraud other people by doing rent to own scams so that's something to watch out but let's say it's a legit because there are companies that do this legitimately first of all in order for the money to count as your down payment we would count as a lender this is all lenders this is Fannie and Freddie let's say the market rent for your unit is a thousand dollars meaning that's what they could rent it for if they're renting it to you for a thousand dollars none of that goes towards your down payment if they're renting it to you for fifteen hundred dollars then five hundred dollars could count towards your down payment provided they're willing to do that okay it's gonna depend on how that contract is written so a lot of times people think all the rent they paid is going to go towards a down payment and sometimes you have sellers you know where they're trying to be legitimate and that's what they've told the person but in reality that's not the way lending works so it's really important that you guys know there are guidelines for buying a house that you have been renting to own and how much of that rent you can use towards down payment is going to be based on what the market rent is and how your contract what the seller was laid out okay there is that overwhelming enough let's go further your contract is going to say a time frame by when you have to be in a position to purchase the house because generally even though you're renting to own it's not the seller who's ultimately going to be giving you the loan it's someone like me so you have to be able to qualify within that time period to get a loan to purchase that house otherwise let's say for instance you know the market rent was a thousand you were paying 1500 the 500 was supposed to go towards your down payment but you have to buy the house within two years what happens if you don't qualify to buy the house within two years A lot of times the seller can keep that money okay because part of the contract is saying that you are a green that you will purchase the house in full by a certain period and one of the penalties of not being able to do that could be they keep the difference Okay so a lot of times people get into these scenarios with these companies or with private Sellers and they're just so excited to be like well I'm renting to own I'm closer to I'm closer to owning I'm closing to being there you really need to read contracts okay because a lot of times it's not a benefit to you and it would be better just to rent like think about it this way like if you're renting a place at Market rent which is a thousand dollars just save the five hundred dollars on your own every month and then buy whatever house you want okay instead of being trapped into buying this specific house because that happens a lot too people move in and they go oh wow I really don't want to live here but they're in this contract okay the beautiful thing about just prepping to buy is that the rent to own system puts you in a box that you may not want to be in okay you want to have the freedom to pick any house you want and if you're like oh well I won't be able to get this house then there's no guarantee that you will be able to get that house right like if your credit score is 400 right now and you have a rent to own contract that says you have to buy it within two years otherwise they keep you know whatever down payment they had whatever the difference is what whatever they're keeping you're going to have to work on your credit to be able to qualify right you still have work to do and that's what I think a lot of people Miss is they go oh well it's rent to own like they know my credit isn't great like I they just sell it to me after two years you have to be able to finance whatever the contract says so if you guys are looking at one of these contracts what you want to find out from them is hey you know do you guys do the financing for me to ultimately buy this and if they say no you want to talk to a regular lender like myself and say hey this is where I'm at you know can I buy this what are the odds what do I need to do in order to buy this down the road and understand what's going to be required before you get in that contract before you potentially lose money okay and look I can't stress this enough because I really see these go sideways a lot you are always going to be in the best position if you are just straight buying the rent to own is a Band-Aid that does not necessarily benefit you and I I just can't stress it enough you guys need to be reading those contracts you need to have the conversations and realistically the only time people really do rent to own is when they don't qualify qualify to buy so if you actually qualify to buy and you're doing rent to own that doesn't make sense if you're like well I qualify but they said I have to rent it first before I buy it why that doesn't make sense that sounds fishy to me it should sound fishy to you too so if you guys actually qualify to buy a house you know and sometimes people go I didn't think I qualified so I did rent to own talk to a lender first make sure you don't qualify before you go into a path but then make sure you will qualify so that you can actually ultimately own it so overall do not rush into rent to own with blinders don't just believe that advertising understand the contract understand the details see if you qualify to buy first right if you qualify to buy odds are they'll sell you the house okay okay it would be highly unusual if they were forcing you to rent a house before they would sell it to you if you could buy it now okay so I hope this has been helpful as always I am licensed in 48 states so everywhere but Utah and Rhode Island I would be happy to help you I'd be happy to discuss this I just hope that you guys don't end up in a bad position and I'm the one that has to go oh man I'm so sorry like we can't do anything here these types of horrible situations where you end up giving away money you know giving up money not understanding what you're getting into they can be avoided and we're here to help thanks for watching guys