Buying and Selling at the Same Time
If you’re like millions of Americans, when you decide to sell your house, that also means trying to buy a house at the same time – which is extremely hard to do! Very few people can afford to buy a new house first, so if you’re trying to accomplish this amazing juggling act like the rest of us, this post is for you! A rent back agreement can take place in any owner occupied home sale, as a type of negotiation. Rent back agreements can make a big difference in the home buying and home selling process.
What is a Rent Back Agreement?
A rent back agreement, also called a post settlement occupancy agreement, is a legally binding agreement that can be a ‘win win’ for both buyer and seller. It’s a situation where sellers retain possession of the house for a short rent back period of time, becoming the new buyer’s temporary tenants. This gives you the time you need to find your dream home, pack and move, and not have to rush everything. Plus, buyers have additional income just when needed.
Who Can Do ‘Rent Backs’?
For Sellers
If you’re a seller, you can discuss a rent back agreement with any potential new buyer, and explain what you’d like to do. See if they would be open to it, and if you feel you could have a good business relationship. Have an idea of how much rent you can afford to pay by checking comparable rentals in the area. Additionally, try to figure out how much time you may need. Keep in mind there are time limits to what the law will allow, and typically a short period of just 60 days is the maximum.
TIP: Sellers can make buyers a great deal: offer to pay their first 2-3 mortgage payments, in exchange for no more than 60 days to vacate the property. Be aware this still will be written up as a lease agreement, right into your purchase contract. Rent back agreements spell everything out, and typically the seller pays the security deposit, upfront rent and any other stipulations, right at closing.
For Buyers
If you’re a buyer in a competitive market, try making your offer with a rent back agreement. Flexible move out dates can be quite appealing to many sellers. As long as you’re not in a big hurry to move into your new home, the rent back agreement is extra income you can use for your mortgage payment, or whatever you need. Not only that, but as the new owners you can charge a security deposit and collect rent right on the closing date, and offset having to pay those hefty closing costs.
TIP: A buyer who becomes a new owner and permits sellers up to a 60-day rent back period, can stipulate that during this time they maintain coverage of the homeowners insurance, obtain renters insurance coverage, or both. Maintain your own home insurance policy as well. Be sure to make any necessary repairs immediately, as you are now a landlord – just for the rental period – of your new home, and thus liable.
The Formal Rent Back Agreement
Ask your real estate agent to get you a post-settlement occupancy agreement, also called a rent back agreement. This is to be the formal occupancy agreement, that both the buyer and seller will have copies of beyond closing. Rent back agreements should include:
- The property address and official owner(s)
- The rental agreement time period (no more than 60 days unless real estate law differs in your state)
- The amount of the security deposit (often $5-10K)
- The daily, weekly or monthly rental rate
- Utility payments and maintenance – who is responsible
- All other negotiated terms (attorney fees, appraisal fees, insurance costs etc. – anything agreed to between buyers and sellers)
Investment Properties
If you’re buying a new home for an investment property, a rent back agreement can be just a head start on being a landlord. Since you’ll have your first tenants already at closing, the rent back agreement can help you with the costs of making the repairs (or the mortgage payment!), initially. Even if buying the home as your personal property, a rent back agreement can be a benefit for both parties.
An Additional Alternative
Sellers interested in another alternative, consider getting a free, no obligation cash offer from Sell Your House Fast – Kansas City. You can choose your own move out date and avoid all the costs of a traditional sale. We provide all the details right here on our website, and you can get started by filling out the short form on our homepage. A representative will be in touch shortly to schedule an appointment to visit the property in person. At that time, they’ll be prepared to make you a cash offer on the spot! There is no obligation to accept the offer. So what have you got to lose? Contact Sell Your House Fast – Kansas City today.
Sell Your House Fast – Kansas City
Here at Sell Your House Fast – Kansas City, we are the cash home buyers who care, and want to help you find a solution to your individual situation. Here are some of the advantages of cash sales:
- NO REAL ESTATE AGENT COMMISSIONS!
- NO CLOSING COSTS!
- NO APPRAISALS NEEDED!
- NO HOME INSPECTIONS NECESSARY!
- NO REPAIRS NEEDED!
- FREE, NO OBLIGATION CASH OFFER!
- GET YOUR CASH WITHIN TWO WEEKS!
- FAIR PRICE FROM A REPUTABLE BUSINESS!
Quick, simple and efficient. What are you waiting for? Contact Sell Your House Fast – Kansas City today!
