Clover Properties FAQ?

We have compiled many questions over our 6 years and have completed this rent to own FAQ to provide the most comprehensive list of answers to give you the best overview of our rent to own program.
If you have a question that we do not answer here, please let us know so that we can add it to our rent to own FAQ for others.

What is rent to own?
How is rent to own different from renting?
Who is rent to own for?
How does your rent to own program work?
Why does your rent to own program work?
What are the advantages of rent to own?
I have bad credit, will I qualify?
Will we be given a budget?
Are the monthly payments higher than rent?
Will my monthly payments change throughout the rent to own term?
Do I get to choose my own home?
When we choose a home, is it just about price and value of the home?
Does Clover Properties approve the house that we want to rent to own?
Who owns the house while I rent to own?
Do I need a down payment?
How much down will I have at the end of the rent to own term?
How do you determine the buy back price for the house?
What is the minimum rent to own term?
What kind of agreements are in place to protect me?
What is the option to purchase agreement?
What is a lease agreement?
Do we need a lawyer?
Who is responsible for maintenance/repairs?
Who is responsible for utilities?
Who pays the insurance on the home?
Who pays the taxes on the home?
Will I need tenant insurance?
What if I decide not to exercise my option to purchase?
What happens if I cannot buy the home?
What happens if Clover Properties goes out of business during the initial term? Do we lose the house?
What are some reasons for not being able to qualify for rent to own?
Are there any hidden fees in your rent to own program? Anything that will surprise after committing to the program?
What areas of the city do you typically work in?

What is a rent to own?
Simply put, rent to own is renting with the option to buy. 

How is it different than renting?
You have an immediate interest in the property in the form of an option to purchase agreement, a deposit and monthly option premiums that will be your down payment when you purchase the home.  You are also considered the “owner” when you move in and have the freedom to decorate or upgrade the house to make it your own.

Who is Rent-to-Own for?
Rent-to-Own is for people who are unable to qualify for a traditional mortgage to purchase a home.  Some reasons could be low down payment, poor credit or self-employment.  It can also for people who cannot refinance their current homes.

How does your Rent-to-Own program work?
Here are the steps to our program:

  • Apply for the program to see if you qualify.  We require standard documents such as credit report, last year’s T4, income stubs, references etc.
  • Once qualified, you begin to work with our real estate agent to find a house that fits our program and your budget.
  • Clover Properties analyzes property and evaluates comparisons for the last 3-5 years to determine average appreciation which determines the future purchase price that the client will buy the house for.
  • Once an offer has been accepted on a property, Clover Properties puts a team of investors together that are specific to that property who will purchase and hold the property for you until you can purchase at the end of the lease term.
    • Lease agreement is signed with the client to rent-to-own for a preset term (usually the time required to improve the client’s credit and build up a minimum of 10% down at the end of the term).
    • Client pays monthly payment (market rent for that area) + option premium which goes towards the clients down payment. This amount varies depending on the initial down from the client (monthly option premium will be higher for lower initial deposit due to the fact that we require you to have 10% down at end of term).
    • Clover Properties will work with the client every 6 months to ensure that their credit score is improving.  This check in will be done in person or by phone and will be added to their lease agreement to ensure that they follow through.
      • At the end of the lease term, client will exercise their option to purchase and complete the journey to home ownership.

 Why does your Rent-to-Own program work?
We are dedicated to professional service by working with only the best real estate agents and mortgage brokers. As well, we focus on a win-win situation for both you and the investors by ensuring that this program is the best option for you and have developed an effective strategy to support you in fixing your credit, building equity quickly allowing you to qualify for a mortgage by the end of the term.

What are the advantages of Rent to Own?
Our clients enjoy being able to accelerate their journey to home ownership because of these reasons:

  • Very little out of pocket to get started on the path to home ownership.
  • Earn Towards Your Down Payment:You will earn monthly credits towards your down payment. Each and every month that you pay on time, we contribute to your down payment!  These additional monies help reduce the price of the house which lets you build equity in your home faster than with a traditional mortgage – no more wasting all your money on rent!
  • Home Appreciation: Any improvements that you make on your home will increase the value above and beyond your final price. This increase in the home’s value is yours to keep because your price is locked in.
  • Move Into Your Home Now:Instead of waiting until you can qualify for a mortgage, you get to move into your home now and qualify with the bank later.
  • Improve Your Credit Score:We consult with you to help you improve your credit score so that you can obtain financing when you exercise your purchase option.

I have bad credit, will I qualify?
We specialize in working with people who have blemished credit. We assess whether your financial circumstances can be repaired to ensure that you could qualify for a conventional mortgage when you are ready to purchase.  Complete our rent to own application today and we will let you know right away if you qualify.

Will we be given a budget? 
Yes, this approval amount is calculated based on your income level and your budget.

Are the monthly payments higher than rent?

The monthly payments are higher to ensure you complete the lease term with a minimum of 10% down which is applied to the down payment on the option to purchase but also used to cover the closing costs that are association with the option to purchase (legal, land transfer etc.).  Yes, you pay more now but the goal is to eliminate any surprise charges at the end of the term.

Will my monthly payments change throughout the Rent-to-Own term?
No, monthly payments are fixed for the duration of the program.

Do I get to choose my own home?
You are involved in the entire process and will work with one of our real estate professionals to find the home you want on MLS.

When we choose a home, is it just about price and value of the home? 
Price and value are important but we look at many other factors including positive appreciation (after all, it is an investment for you), location, amenities etc.

Does Clover Properties approve the house that we want to Rent-to-Own? 
Yes, the house has serve the best interest for yourself and for the investors purchasing the home on your behalf. Clover Properties will complete a full analysis on the property to ensure that it will have good value in the future.

Who owns the house while I Rent-to-Own?
One of our investors will purchase your Lease-to-Own home while you repair your credit and build your down payment.

Do I need a down payment?
Yes, for every rent-to-own we must have an initial minimum down payment of $10,000 up to $300,000 or 3.5-4% on properties over $300,000. The more you have to put down initially, the lower your monthly payments will be.

How much down payment will I have at the end of the Rent-to-Own term?
Our program is developed to ensure that all of our clients have built up at least 10% down payment through monthly option premiums, incentive credits and initial down.  This will be your 8% down plus 2% for your closing costs at the end of the Rent-to-Own program.

How do you determine the buy back price of the house?
We use an average appreciation value based on historic market values in the area the house is located to calculate the Future Purchase Price.  We are fair and compare apples to apples.

What is the minimum Rent-to-Own term?
The Rent-to-Own term can be two to three years depending on your qualifications in the program.  We have had instances where we have had to put five year terms in place.  Each situation is dealt with on an individual basis.

What kind of agreements are in place to protect me?
We use an Lease Agreement and Option to Purchase Agreement that have been drafted by real estate specific legal professionals in order to protect your deposit, monthly option premiums and right to purchase the home.

What is an option to purchase agreement?
The option to purchase agreement is a document that outlines your exclusive option to purchase the home you choose to rent-to-own.  It will include your initial deposit, monthly option premiums and future purchase price in the agreement.

What is a lease agreement?
The lease agreement is like a lease where it states the responsibilities of the leasee and the owner.  It will include the length of the term, the monthly payment as well all the details regarding use and maintenance of the home.

Do we need a lawyer?
The Agreements have been drafted by real estate specific legal professionals.
We DO recommend that you have your lawyer take a look at all agreements, but your lawyer does not need to create new documents.

Who is responsible for maintenance/repairs?
You will be responsible for any repairs and maintenance of the property as any other home owner would.  This is a huge responsibility and you will benefit from any improvements that may increase the value of the home once you exercise the option to purchase.

Who is responsible for utilities?
You will be responsible for paying all utilities which can include electricity, gas, cable TV or internet service, etc.

Who pays the taxes on the home?
The investor(s) who will be holding the home until you are ready to purchase will be responsible for paying the taxes on the home.

Who pays the insurance on the home?
The investor who will be holding the home until you are ready to purchase will be responsible for paying the insurance on the home.

Will I need tenant insurance?
You will need contents/tenant insurance which covers certain items inside your home such as carpets, appliances, personal belongings, etc.

What if I decide not to exercise my option to purchase?
In extreme cases, if you decide not to exercise your option to purchase you will lose your initial deposit and monthly option premiums which can add up to thousands of dollars.  We do not recommend this. 

What happens if I cannot buy the home?
There are a few options should you be unable to qualify for a mortgage by the end of the program.   If you require more time to repair your finances we can discuss extending the lease term until you are able to.

What happens if Clover Properties goes out of business during the initial term? Do we lose the house?
If Clover Properties were to go out of business during the Lease-to-Own Term, it would have no effect on your Rent-to-Own transaction.  Clover Properties acts as a broker between you and the Investor(s). Once you qualify and find a home, we find an investor to purchase the home on your behalf. 

What are some reasons for not being able to qualify for Rent-to-Own?

  • Not enough down payment
  • Cannot prove steady income
  • Inability to meet deadlines (we perform reference checks)
  • The house prices you are looking at are out of your Lease-to-Own range

Are there any hidden fees in your Rent-to-Own program?  Anything that will surprise after committing to the program?
This is easy to answer.  No.

What areas of the city do you typically work in?
We work with a network of fantastic, experienced realtors throughout the GTA and surrounding areas so we are happy to work with you to buy your home in any area in Ontario (Scarborough, Etobicoke, Mississauga, Brampton, Markham, Richmond Hill, Pickering, Ajax, Whitby, Oshawa, Bowmanville, Newmarket, Bradford, Barrie, Orillia, Kewick, Kitchener, Waterloo, Cambridge, Guelph, Stratford, Hamilton, London) to name a few areas.