Rent to buy offer seems great but 'be wary' say experts
MOVING into your new home without having a bank loan.
It sounds too good to be true, but that's the deal being offered to buyers in Mackay.
A "stuck market" and the bigger banks tightening their grip on lending, has led Warwick Bergen to try selling his friend's Slade Point property through a delayed settlement scheme.
Homemade signs advertising the deal are scattered around the region's roads.
"This is not a rent to buy scenario," he said. "What we are doing is giving people a chance to build a deposit so they can buy the place down the track."
He values the four-bedroom Slade Point house at $580,000.
"If people came in with zero deposit, they would pay $980 per week. It's just a delayed settlement, normally you have 28 days to get a deposit, but this can be up to four years," he said.
"The bonus is you get to move in straight away."
Statewide Conveyancing director Roland Taylor said these sorts of agreements suited some people, but didn't suit most.
"There are certain people who struggle to save for a deposit," he said. "They might be good at paying rent and would be good at paying off a mortgage, but, for whatever reason, they just struggle to save enough for a deposit.
"It has nothing to do with their income. I have had clients who were on high salaries but just couldn't save."
Mr Taylor said the scheme could work really well for such people. However, if you could save, the traditional home loan plan was a safer option for most people, he said.
REIQ Mackay Zone chairwoman Sally Richards said she would advise everyone to make sure they read the fine print closely. "Buyers need to be wary entering into these agreements. I would advise them to seek legal advice before signing," she said.
Are delayed settlements a good idea?
This poll ended on 23 December 2013.
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