The process of rent to own in Perth is quite different from the typical home-buying process. Other than the fact, you’ll still be working with the landowner to sign off the contract. Meanwhile, everything included from purchase amount to closing price is debatable. So, it’s tricky. Here are a few of the factors involved in the rent-to-own agreements to get an idea of how everything will go.
Purchase Price for Your Rent to Own in Perth
The agreement will have a specified amount of purchasing price. The amount can either be the current value of the property or a predicted one. Whatever the price is, it will become official and binding when the seller and buyer sign the contract. However, in some cases, the prices are decided after the lease has expired. Make sure you choose a method that suits your case better when you look for rent to buy homes for sale.
The Price Set Aside from Rent
As a part of this scheme, you’ll have to pay a certain amount every month with the rent. It is why the prices are a bit high when you opt for rent-to-own. The extra percentage of the amount you pay is collected as a credit, which will be directed towards the final purchase of the property. The additional amount that you have to pay is decided after the negotiation between buyers and sellers. So, be smart about it!
The Repairs and Upkeep Costs
In some contracts of rent to buy homes in Perth, WA, the seller can ask you to cover the cost of repairs or maintenance. The seller can hook you up for anything, from landscaping to the HVAC unit. That’s why it’s important to involve experts like Stop Renting Perth to help you clearly understand what you are responsible for.
Upfront Fee to Keep Option of Buying
You’ll have to pay a non-refundable fee for this agreement to work, usually called an option fee. This amount is required to keep the opportunity of buying the house open. In some cases, the seller might allow putting this amount as equity in the home. There is no standard amount that you have to pay. Typically, it’s some percentage out of the total purchase price.
Agree On the Lease Term for Rent to Own In WA
The next thing on the list is the negotiation about the lease term. If the lease ends and you decide not to pursue a purchase option or don’t qualify for the financing, the opportunity to purchase agreement will become invalid.
Changeover From Renting to Buying
Unless you have enough cash to buy the house outright while on rent, you’ll need to secure financing at the end of the lease term. You’ll have to set a closing date with the mortgage lender. Then, depending on the terms, the percentage of money set aside will be credited to you.
As rent to own in Perth isn’t as regulated as the basic buying house process, all the terms are negotiable. If you are entering the process, you’ll need professional assistance to understand how everything works.