What’s a rent back and why you might want one.
Imagine you sell your house and the closing date is just a few days away. Unfortunately you get word that your new home isn’t quite ready yet. You don’t have friends or family in the area that you can stay with for a few weeks and a hotel is too expensive for that stretch of a time. A rent back is here to save the day!
The technical term is seller in possession, and it means that the seller can stay in the home for a predetermined amount of time after the transaction closes.
The seller may ask to remain in the home for a short period of time for a myriad of reasons. The seller could be in escrow on a new home but it doesn’t close for several more weeks. We recently have had a seller want to remain in the house so that they could celebrate a landmark birthday before moving to another country.
With the current housing market it can be tough getting a buyers offer accepted. Writing a rent back into your offer is a good way to sweeten the pot. Buyers have the option of charging rent during the time that it is being rented back to the sellers. This can help offset the cost of the mortgage. One thing to keep in mind, when having your Realtor put a rent back agreement together is making sure that it does not exceed 59 days. Anything over 60 days makes it considered an investment property. Investment properties have different loans and interest rates.
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