As interest rates rise and consumers feel the pressure of inflation, housing sales in Saskatoon are dropping, but there has been increased interest in rent-to-own options for would-be homeowners.
Saskatchewan Realtor’s Association CEO Chris Guérette said it wasn’t something they were tracking, but she believed the numbers were on the rise.
“We do know that anecdotally, these are services that are starting to enter our market, which is not surprising,” she told CTV News.
“Anecdotally, they’ve been saying that they’ve received close to 500 applications since the month of June. So that obviously means that there are individuals out there that require other options to purchase their first home.”
Braveya Homes’ Joel Boschman said his company helps people qualify for mortgages.
“It’s sort of a newer option for people, but it’s a great option. We help people who have gone through divorce, possibly bankruptcy, people that are newcomers to Canada, and they may not have any credit history, or they may have bad credit,” he explained.
He said they help people get into a home before they can qualify for a bank mortgage.
Boschman said his company has helped 15 people and have been able to get seven of those to qualify for mortgages.
“There’s not specifically a qualification, other than they have to have a secure job, they have to have secure income, they have to have enough money for the deposit, which is held in trust, and that money goes towards the down payment on the house,” he said.
But it doesn’t stop there, Boschman said his company also helps people improve their financial literacy.
“We educate our clients on what they possibly may need to do in order to qualify for a mortgage from a lender. So we’re able to help people to maybe set a budget, a better budget in place to be able to save up more money. Maybe their credit isn’t where it should be, so we help them to clean up where they’re spending it, and what they may be able to do to increase their credit score,” he said.
Guérette said she agrees with prospective homeowners having more options.
“We know affordability is top of mind for not only everybody in the country, but in Saskatchewan as well. Even though some individuals may on paper, be capable of purchasing a house, sometimes they need a little bit of help to get their, their foot in the door,” Guérette said.
“I think having more options for individuals looking for homes is always something that we would think is beneficial to the market. More option just means that individuals who are maybe struggling to get into their first home will have more options to consider that may work for them. It may not work for everybody, but it may work for some.”
Boschman said it is vital that those considering rent-to-own services understand what is involved in home ownership.
“People have to be committed to being homeowners. This isn’t a rental option. This is a house purchasing option. So a lot of people think that it’s just a rental and we’re not in the rental business. We’re in the business of helping people to purchase homes,” he said.
“Being a homeowner is not cheap. There’s a lot of expenses in owning your own home, and people just have to be aware of those expenses.”
Guérette advised those considering rent-to-own options talk to someone who has experience in the real estate market.
“I think it’s always important before you embark on any new service is to trust your realtor, trust your lawyer, and those professionals that are around and that you can trust to make sure that those services that you do use are trustworthy, have a good track record, and that you’re embarking in something that you feel comfortable with,” she said.
“If it can get more people into homes in a very credible and trusted way, then that’s a really important service.”