Blog

The Leaseback – Renting Back Temporarily After Selling

What if you want to sell your home, but you need more time to make a move? What if you want to buy after, but want to avoid a second move?

A seller leaseback is a common tool to extend the time you spend in your property, even after you have closed escrow and received your proceeds. It is simple – you “lease” the property back from the buyer. Most typically, the seller agrees to pay the buyer’s PITI – that is: Principal, Interest, Taxes, and Insurance. In the case of a condominium the seller would also pay the HOA fee. Please note that this is entirely negotiable, and many leasebacks are done at a “market rate” or even for free.

Leasebacks are most commonly 1 month – but sometimes vary. It is important to confirm with your lender what their policy is. Most lenders allow a 30 or 60 day leaseback, but consider anything longer to be an investment property usage, and against the terms of the loan.

Other considerations in leasebacks are common. Sometimes sellers leave a deposit, and sometimes they don’t. The seller may also continue to pay pool vendors and gardeners. Typically, however, the seller would not allow remodeling, but would allow contractors to inspect the property.

Finally, leasebacks can also be beneficial to buyers, who may be negotiating their own sale, or need extra time before they can move or begin to remodel.

See chart below for a common timeline to expect for a leaseback. (Click on it to open full size)

For any further questions, please contact me.

Leave a Reply

$900,000,000+
IN SALES
100+
COMBINED YEARS OF RE EXPERIENCE
#1
KELLER WILLIAMS SALES GROUP IN LA
1,600+
PEOPLE & FAMILIES HELPED