Is this is legit?

[outbackjack]

I and sorry if this is someone on this forum

I came across this site

http://www.easyhomes.net.au/RunScript.asp?page=13&p=ASP\Pg13.asp

Dont have any problems with the idea of vendor finance and wraps etc.

However they ask for a non refundable deposit of $750. You wouldnt even need to have or sell a house.

Just get income through deposit?

And then the payments seem high?

OK rant over

 

[Propertunity]

http://www.easyhomes.net.au/RunScript.asp?page=13&p=ASP\Pg13.asp
Dont have any problems with the idea of vendor finance and wraps etc.

Sounds like an outfit similar to Rick Ottons:
http://www.rickotton.com/webuyhouses/

However they ask for a non refundable deposit of $750. You wouldnt even need to have or sell a house. Just get income through deposit?

Well I'm not defending these guys, I have no affiliation and I've never done a wrap (and I don't plan to) but you'd have to get a lot of $750 deposits to do any good out of taking deposits only.
And if I had to deal with lots of credit-impaired ppl - which are these guys' audience - I'm guessing they get a lot of time wasters and the $750 might weed some of these out for them.

And then the payments seem high?

Well that's how wrapping works. Low / no deposit, high payments, 2 - 3 years of good payment history from the buyer and they sell the mortgage to a mainstream lender and exit with profits.

 

[Kristine..]

Actually, Propertunity,

..."Well that's how wrapping works. Low / no deposit, high payments, 2 - 3 years of good payment history from the buyer and they sell the mortgage to a mainstream lender and exit with profits"....

No, it isn't. What happens is, that after a while the 'buyer' wants to settle up the Terms Contract and finds that no mainstream lender will settle on a Terms Contract

And if the 'buyer' then asks the 'vendor' for a Mortgage Back, which under the Sale of Land Act they can do at any time, the Mortgage being for no more onerous terms than those described in the Terms Contract, the 'vendor' may very well seek to rescind the contract.

If the vendor has a mortgage over the property, which is very likely, then it is highly unlikely that they would be in a position to comply with the legal request of the buyer to convert the terms contract to a registered mortgage, as this would mean that they would have to satisfy the existing mortgage to enable the buyer to become the registered proprietor.

All that a buyer has to do is to have the money available for the usual Stamp Duties, government Fees & Charges and usual conveyancing fees. Legally, a vendor may not unreasonably refuse to convert the Terms Contract to a registered mortgage.

Terms contracts are legitimate, but the vendor must be in a position to be able to fulfil their legal obligations to the purchaser.

The provisions of the Sale of Land Act were never meant to be used for someone to trade in property.

Entering into a Terms Contract is very much Caveat Emptor (Buyer Beware) and can certainly lead to tears before bedtime. The tears being the unwary buyer.

Cheers
Kristine

 

[Propertunity]

Kristine,

Well I default to your explanation as you obviously know more about it than I. I must not have been paying attention in the seminar or perhaps the seminar presenter left out some critical components in his explanation of how this works in practice.

 

[kathryn d]

We have a rent to own property. The tenants had 2 years before they had to purchase the property. They paid the small deposit (1 % of asking price) plus monthly fair market rent +"option fee". In 5 months they deafulted.

Now if they want, they can start the process again or move.