Seller Rent Back is the Buyers Best Friend Want to take advantage of the incredibly low mortgage rates, but not find the home you want at terms that work? Are sellers too scared to close fast? I want to explain how you can use rent back to your advantage for buying on The Main Line. First off, sellers are reluctant to sell because they don’t know where they will go. Quite rightly. It is an incredibly tight market right now. One way to take advantage of the conditions is to rent or lease back a home. This removes contingencies and is an arrangement where a seller will stay in their home as a temporary tenant. Buyers are able to secure a home at low rates and also collect rents from sellers.
So how does this work? A seller rent-back is typically included as part of the offer for the home (or, the buyer can request a monthly fee from the seller) Often, buyers are using the free months of occupancy as a negotiation tool-in addition to going over the asking price. They are typically 30 day and 60 day agreements and a seller typically pays a security deposit of several thousand dollars. The terms in the contract are called post occupancy agreement and this language is very important as a buyer to pay attention to, in case of an issue. So does a rent back make sense for you as a buyer? A few things can be problematic in a rent back, one is if there are issues with the seller vacating the property. Your best bet when considering attractive terms for sellers and the rent back option is having a reputable realtor to structure the contract so that it protects the buyer from the possibility of a rent-back going awry.
When you are searching for real estate in todays market, be sure that you have a realtor that is experienced in drafting post occupancy agreements. I have drafted many and understand the nuances and risks that a poorly drafted agreement poses. It is a popular misconception that just anyone can be a buyers agent, but this is an example of when a skilled buyers agent makes all the difference.
If you are shopping for a new home on The Main Line and want to explore a rent back option, contact me today. Kimmy Rolph sells The Main Line and local areas.
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