Rent Back to Where You Once Belonged!
The last several years have witnessed “sellers’ markets” in many areas. For the uninitiated, this means that as a home buyer, it has been of utmost importance to present a strong offer to any seller in the hopes that it may be accepted over others that perhaps have fewer complicating factors. It would seem then that all sellers would benefit from this climate, however, circumstances change when some of those same sellers must immediately turn around and then become buyers themselves. One aspect of a home purchase that can bedevil the “move up” buyer has to do with how one actually coordinates the timing of any move such that one can sell, yet still keep a roof over one’s head without having to move twice. The solution can be as simple as a “rent back,” and it’s something that every seller should understand before listing his home on the market.
A rent back essentially does what it says. The owner of any home actually sells the home to a new buyer. The title transfers and the seller receives the proceeds of the sale --- critical because these may be the same down payment funds that will be used to purchase the new house. However, upon close of the sale, the erstwhile owner becomes a tenant to the buyer and the buyer agrees to “rent back” the home to the seller until he or she can relocate and close on the new purchase.
There are some technical considerations of any rent back. Foremost, the vast majority of investors will not permit a rent back to exceed sixty days. Beyond this, lenders begin to question if the home will be owner occupied at all. Secondly, the terms of any rent back should be stated on the purchase contract or a contract addendum.
Using a rent back can be the key to unlock the door of a less stressful transaction and move. If you would benefit from further insight about this process, get in touch today and I’ll be happy to explain how it may fit your own scenario.
Executive Loan Advisor
NMLS: 22343 CalBRE: 01297944
Cell: 415-367-5959 Fax: 415-366-1590
1058 Redwood Highway, Frontage Road, Mill Valley, CA 94941
RPM Mortgage, Inc. – NMLS#9472 – Licensed by the Department of Business Oversight under the Residential Mortgage Lending Act. Equal Housing Opportunity.