RENT BACK GUIDE
Considering a Move But Concerned About Where You'll Go?
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We can position your home to optimize value in today's dynamic market Access private off-market home options through our private firm portfolio We're experts at structuring owner rent-backs which allow you time to stay in your home while preparing for the next chapter of your life.
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WHAT IS A RENT-BACK AGREEMENT?
A rent-back is a rental agreement between the home buyer and seller that allows the seller to continue to live in the home after the closing date in exchange for rental payments. The arrangement, also sometimes called a “sale and rent back” or a “postsettlement occupancy agreement," is usually temporary. It usually occurs when the seller experiences a delay in finding or moving into a new home.
Agreements between the buyer and seller are usually structured as normal leases/leasebacks Rent backs are typically negotiated while an offer on the seller's home is presented Buyers and sellers should secure appropriate insurance coverages for the period in which the seller remains Both seller and buyer should execute a written lease outlining the terms of the tenancy to ensure no misunderstandings occur Buyers should be aware that normal "access" to property clauses are in place limiting the ability to start projects, etc. without the tenant's permission Buyers can "lock in" a home of their choice now, then move in when the tenant/prior owner's leaseback is up Buyers have the ability to see how the tenant has "lived" in the house and taken care of it up to that point
BENEFITS OF A RENT AGREEMENT
BACK
SELLERS The potential benefits for a seller entering into a rent-back agreement include the following: Take time to find your dream home. A rent-back agreement gives you as much time as a buyer is willing to let you stay in the home. Avoid moving around or renting. You can avoid living in temporary housing or renting a storage unit. Accept an attractive offer within a quick close timeline. When you find the right home, you can move in fairly quickly.
BUYERS Buyers can also experience the following benefits with a rent-back agreement Make an offer more attractive. If the seller needs to live somewhere for a month or so, and a buyer can offer to let them live in the home, it might be just what tips the scales in the buyer's direction. It might make the offer more attractive to the seller. Earn rental income at the current market rate. The extra income can offset not only your mortgage payments but also some closing costs, appraisal fees, and attorney fees.
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CLIENT TESTIMONIAL
“I was a little concerned about selling my house because I hadn’t decided where I was going next. It never occurred to me that I might be able to rent my house back from the new buyer until my agent suggested it. The buyer needed some time to transition, so it turned out to be a win-win for everyone!" Hope S.
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