Here’s everything you need to know about rentback agreements.
In our last video blog, we talked about the possession date, and today we want to discuss a closely related topic: rentback agreements.
A rentback is an agreement between the buyer and the seller that can be done before or after the final acceptance. It states that the seller can lease back the home from the buyer for a specified amount of time. The seller is essentially renting their old home from the buyer for a brief period.
When a rentback agreement is in place, there are typically two final walk-throughs. One takes place right before the buyer closes on the property, and the other takes place right before the buyer takes possession of the property. It’s similar to the walk-through a landlord would do on a rental unit.
When do people use a rentback agreement? In years past, we would see only one or two per year, but they’ve become much more common. This is due to our low inventory. If someone sells their home, they want to make sure they have time to buy another house before they have to move out. In our hot market, it’s much easier to sell than buy, so giving yourself extra time to shop for a home is attractive to a lot of sellers. Because it’s hard to find a home, buyers are more likely to agree as well.
If the seller needs time to find a home, and the buyer is flexible, rent-back agreements are a good way for both parties to navigate our hot market. If you have any specific questions about rent-back agreements, or if you have any other questions, please reach out to us. We are always willing to talk.