First-time homebuyers face a lot of challenges. They struggle to save a deposit for a mortgage while paying the monthly rent. They are also mostly unaware of their options to get on the property ladder.
Prysm Property has formulated a scheme called Tenant-Buyer Scheme, keeping in mind the hardships and challenges faced by first-time buyers, including young healthcare professionals and ex-pats.
In simple words, the Tenant-Buyer Scheme is an agreement to lease out a residential property for a certain period and keep the possibility of purchasing it before the tenancy contract is over. A Tenant-Buyer is a future buyer who has the choice to purchase a property at an already agreed price within a decided timescale.
To learn more about the scheme, read our blog:
What Is A Tenant-Buyer Scheme, And How Does It Work?
Step By Step Guide To Tenant-Buyer Scheme
Let’s discuss the steps in detail that a Tenant Buyer will be walked through from the start of enquiry through to completion of purchase.
We’ll walk you through the 4 stages of our Tenant-Buyer Scheme:
1. Enquiry Stage
2. Agreement Stage
3. Rental Stage
4. Purchase Stage
1.Enquiry Stage
This is the first point of contact between prospective Tenant-Buyers and Prysm Property. At this stage, we get you up to speed and provide you with all the required information regarding this scheme.
● We receive your enquiry
● You are added to our mailing list and we provide helpful articles preparing you for home ownership
● We gather some basic information about your situation, either by phone or via our webform. We are more than happy to answer any questions you might have.
2. Viewing Stage
Once we have had a chat and fully understand your requirements, the next step is the viewing stage, where you start looking at suitable properties.
● We will email or call you when a property matching your criteria becomes available.
● We will book a viewing for you.
● If you like the property and want to secure it, we will take a non-refundable initial payment of £200. This will hold the property for you while we carry out credit checks and referencing. At this stage, 6 months of bank statements and references from current and previous landlord are required.
● Next, we will organise a meeting with a mortgage broker to understand what you must do to secure a mortgage and how long this will take.
● At this stage, you can also seek independent financial advice – we can help you with credit checks and mortgage broker feedback.
● Get all contracts signed.
● Agree on the move-in date.
● You pay a 3% Option Consideration fee.
● Congratulations, you get the keys to your new home.
3. Rental Stage
This covers from the day you move in, until the day you exercise your option to buy. You get to enjoy living in your home from the start.
● You pay rent (fixed for the term of the contract) and the Option Consideration fee every month.
● Depending on the property, there will be a bi-yearly inspection.
● We will send an annual report showing your Option Consideration balance (how much you have saved towards your deposit) and the remaining time left on your contract.
● You will be free to make cosmetic changes to the property, improving to your taste and increasing the property value from the moment you move in. This includes responsibility for upkeep and maintenance and taking care of your home as the eventual buyer.
● If you want to make structural changes to the property, you will need written permission.
● If you get a windfall and want to complete the purchase early, there are no penalties – just let us know, and we will complete the paperwork.
● If for any reason you have to terminate the contract, you are free to walk away but will have to surrender any Option Consideration fees.
Just as we are committed to ensuring you can complete the purchase without property owners pulling out – we also have to protect them and work with committed buyers.
4. Purchase Stage
This is the final stage and includes all the steps required to complete the purchase of your home.
● We will contact you when you are 6 months short of completing the tenancy contract and will discuss the next steps with you.
● With 3 months to go, we will send your final Option Consideration balance (~10% deposit) and ask you to provide written confirmation to complete the purchase.
● You will contact our specialist mortgage broker and arrange a mortgage – this could take 4-6 weeks to complete, and the mortgage offer will usually be valid for 3 months.
● Once the solicitors are notified to complete the purchase, it’s time for you to celebrate.
If you still have any questions, feel free to contact Prysm Property.
