An Option (related to the Sale and Purchase of a Property) is an agreement between two parties in which:

The Offeror [the Seller] and the Offeree [the Purchaser]:

  • Agree to that the Offeree/Purchaser can purchase the property of the Offeror/Seller
  • On the terms and conditions as set out in a Deed of Sale
  • At a future date, when the Offeree exercises the Option to Buy

Benefits for the Purchaser:

  • He/she secures a property and “fixes” the purchaser price in a buyer’s market
  • Only takes transfer (8-24 months) later (or any time period as the two parties may agree on)
  • Without the immediate requirements of:
    • an upfront deposit (usually 10% deposit required on signature)
    • an upfront bond approval (usually needs to be approved 14-30 days after signature of the Deed of Sale)
    • Upfront payment of transfer duties, legal costs and bond registration costs.

Benefits for the Seller with and r2b Option:

  • The Purchaser assumes the obligations of the Seller and the Purchaser pays:
    • rental which is much higher than the average return on a rented property (a yield close to the prime rate of lending, compared to the average yield of 5 - 6% on a rented property income)
    • the rates and taxes
    • levies
    • takes over maintenance
    • receives rental through the r2b rental insurance product
      • on the 1st day of each month
      • insured and thus guaranteed for 3 months on default
      • legal costs to recover outstanding rental and eviction costs are also covered by  the r2b Rental Insurance