Welcome to Term Tuesday! I'm Carol Vanlandingham with Homes by Carol, here to simplfy real estate jargon for you. Today, we're exploring 🏠 Rent-Back, or Leaseback!"
Rent-back, refers to an arrangement where the buyer, who is now the new homeowner, agrees to allow the seller, the now-tenant, to stay in the house beyond the close of escrow. 📝
This rent back is often put in place at the time the buyer and seller go under contract. The rent back agreement is often called a Post Occupancy Agreement and is a separate contract that the Buyer and seller agree on.
The terms negotiated can involve a lease deposit, a daily rental rate, and a specified length of time. 📅
The daily rate can sometimes be determined by looking at the new homeowner’s out-of-pocket costs for the mortgage and considering the possible inconvenience this might cause them in delaying their own move. All these factors come together to set a fair daily rate. 💵
For example, if the new homeowner’s mortgage is $3,000 a month, that’s about $100 a day. If the seller needs to stay for an extra 10 days, the rent-back might cost them around $1,000. This can be a win-win situation, giving sellers more time to move and buyers some compensation for the delay. 🤝
whenwe are in a Sellers market, and Buyers are competing for homes, Buyers may offer for the Seller to stay up to 30-60 days free of charge, to make their offer more appealing than another Buyers offer.
Got more questions about rent-back agreements or other real estate terms? Drop them in the comments below! 📬
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17 сен 2024
