Providing equity downpayment vis the traditional and most common way to enter the housing market. In today's economy, with increased expenses and high housing prices, it has unfortunately become increasingly difficult to meet this requirement. The path to homeownership has thus become more challenging, especially for first-time buyers.

For more people to have the opportunity to own their own homes, new ways of buying homes have been developed in recent years. The emergence of these new home-buying models provides you with opportunities to overcome the equity capital requirement, the biggest obstacle, and begin your housing journey.

With the new home-buying models like rent-to-own, co-ownership, and Bostart, you can enter the housing market without equity or with little equity.

Address Rent-to-Own

Our drive to help you become a homeowner is our driving force in developing a rent-to-own arrangement. Our rent-to-own is a home-buying model that allows you to enter the housing market without equity capital. With this arrangement, you have the opportunity to purchase the home you are leasing after a certain period of renting. In our case, you enter into a long-term lease agreement, pay an establishment fee, and obtain an optional right to purchase the home at a pre-agreed price.

During the lease period, you pay market rent and save up equity capital to take over ownership. If you have some equity, you can use it to become a co-owner from day one. In that case, you'll pay less rent to us each month, which will help strengthen your ability to save for equity. Along the way or towards the end of the lease period, you have the opportunity to exercise the purchase right. This right can be used multiple times, meaning you can buy shares of the home incrementally and create ownership as early as possible.

Advantages of our lease-to-own:

• Since the price is pre-agreed, you can skip the traditional bidding process.
• You have the right, but not the obligation, to buy the home. This means you can choose not to take ownership if you change your mind. This flexibility allows you to be more resilient to both planned and unplanned changes.
• You have the option to become a co-owner either from the start or during the agreement period. When it suits you, you can purchase shares of the home and start benefiting from the home's appreciation of the portion you own. Your monthly rent cost is also adjusted down with your ownership percentage.

Disadvantages of our lease-to-own:

• By entering into a rent-to-own agreement with us, you pay for the right to buy the home, which is an establishment fee. If you decide not to buy the home, you may lose the money you paid for the establishment fee.
• You must have the ability to save for equity capital to take ownership of the home.
• Even though you have the option to become a co-owner with us, which means you benefit from the home's appreciation on the portion you own, it is still not as profitable as being able to buy the entire housing from the start.

What happens if you enter into an agreement with your partner and break up with your partner?

Our rent-to-own model offers flexibility so that you can better handle unexpected changes. If you have purchased shares in the home together and break up, you can buy out your partner. Alternatively, we have a preferential right to buy back your shares, potentially just your partner in this case, so that you can continue the agreement with us.

Many property developers offer rent-to-own under similar conditions in the market. However, these companies typically offer a limited number of rent-to-own homes, and the model is only available for new housing projects. This means there is a limited selection of homes, and you may have to wait until the project is built before moving in. In addition, you usually need to be a member of these housing developers to be offered a ent-to-own, and those who get offers are usually the members with the longest tenure. Therefore, there can be high competition and difficulty in getting an offer.

Since Address is not a property developer, we are free to invest in any home to offer rent-to-own agreements, including homes on the secondary market. Thus, you have the opportunity to move in and enter the housing market right away. Moreover, there is a wider selection of properties, increasing your chances of finding your dream home.

Co-Ownership

Co-ownership is an arrangement that allows you to buy a portion of a home and have the entire home to yourself. This is an option that Address can also offer as part of our rent-to-own solution. In this model, you co-own the home with the provider in a joint ownership. By purchasing only a portion of the home, you can enter the housing market without meeting the equity capital requirement, which is at least 15% of the home's value. With other providers, you typically need to buy at least 50% of the home, which means you must have at least 7.5% equity capital. Beyond that, you can choose how much ownership share you want to purchase. This means you can choose to buy 50%, 60%, 70%, 80%, or 90% of the home. For the portion of the home that you don't own, you lease it from the provider and pay an amount equivalent to market rent. Additionally, you must pay shared expenses for your share of the home. If it suits you and your finances in the future, you have the opportunity to increase your ownership share until you own the entire housing.

When buying a home with co-ownership, you must live in the home as your primary residence. If you wish to increase your ownership share before the takeover, the price for purchasing an ownership share is the same as the regular price at the time of contract signing. You must also pay an administration fee to the provider and cover expenses related to your purchase.

If you want to buy a larger ownership share after the takeover, the price for purchasing an ownership share will vary. At the very least, it will correspond to the cost of the ownership share when you bought the home, but it may be higher if housing prices have increased. The price increase is adjusted according to the price index from Eiendom Norge for the relevant area. In that case, you must also pay an administration fee and expenses to cover costs associated with your purchase. If, after ten years, the provider still owns a portion of the home, they have the right, but not the obligation, to demand that the joint ownership be dissolved and the entire home be sold.

Advantages of co-ownership:

• You have the flexibility to choose the ownership share that suits you and your budget. You also have the right, but not the obligation, to increase your ownership share.
• You can enter the housing market with a lower equity capital requirement.

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Disadvantages of co-ownership:

• It can be challenging if you want to eventually own the entire home because you must save up for equity capital while also paying market rent.
• The model is only available for new housing projects. Therefore, you must wait for a period before you can move in.
• The price for purchasing an ownership share is at least what the ownership share costed when you bought the home, but it may be higher if housing prices have increased. This means that even if the home has decreased in value, you must buy out the other owner (the home provider) at the same price they originally bought their share for.

Bostart

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Bostart is a home-buying model that allows you to enter the housing market with less equity capital. With Bostart, you can purchase a home at a lower price than the regular market price, with the provider having the right, but not the obligation, to repurchase it. When you acquire the home through Bostart, you become the full owner of the property. However, the provider registers a lien to ensure that the right of repurchase is preserved.

If you wish to sell, the provider has the right of first refusal to repurchase the property at the original sale price, adjusted for market price changes. Price changes are based on the housing price index from Eiendom Norge and are calculated from the time you took ownership until you contact them about repurchase. If the provider declines to buy, you are free to sell the property in the open market. You cannot buy your way out of their right of repurchase.

To purchase a home with Bostart, the property must be your primary residence. If you have purchased the property with a Bostart contract and want to switch to a regular contract, you can do so up to four months before taking over, for a fee. When you sell the property, you are responsible for a portion of the selling costs, equivalent to 1% of the repurchase price, with a transfer fee, settlement, and obtaining property information. The provider also has the right to require you to obtain a property sales report and purchase home seller's insurance at your expense.

Advantages of Bostart:

• You can purchase a home at a lower price than the regular market price, reducing the need for a larger down payment.
• You own the entire property from the start.

Disadvantages of Bostart:

• You still need to provide 15% equity capital even though the property is offered at a discounted price. For example, if a home is offered at 4 million but reduced to 3.6 million (a 10% discount), you still need to provide 540,000 kr in equity capital.
• The provider has a preferential right to buy the home at the original discounted sale price, adjusted for the housing price index. This means you cannot list the property for sale in the open market and get the best possible bid and market price in a bidding process. In other words, you have limitations on how much you can earn from a rise in home prices, considering that you pay slightly less today.
• If home prices fall, the price at which the provider repurchases the home will be lower than what you paid for the property initially. In other words, you will incur a loss, similar to other homeowners.
• The program is only available for new construction projects. Therefore, you must wait until the home is finished being built before you can move in.

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If you would like to know more about how our program works, please contact us or submit a non-binding application here.

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