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.

NEW IDEA: Warwick Bergen has placed this roadside advertisement.
NEW IDEA: Warwick Bergen has placed this roadside advertisement. Andrea Davy

"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.

Current Results

Yes

42%

No

57%

This is not a scientific poll. The results reflect only the opinions of those who chose to participate.


Local taxi driver busted more than 4x legal limit

Premium Content Local taxi driver busted more than 4x legal limit

The magistrate was not impressed with the man’s actions when he appeared in Gatton...

Western Downs woman killed in horror Warrego Hwy crash

Premium Content Western Downs woman killed in horror Warrego Hwy crash

A HORROR collision between a roadtrain and a car along the Warrego Hwy has claimed...

Emergency crews on scene of vehicle rollover; Laidley North

Premium Content Emergency crews on scene of vehicle rollover; Laidley North

Four ambulances are on the scene of a vehicle rollover this afternoon. DETAILS...