Rent Back Agreement in Real Estate, What is it?
What is a Rent Back Agreement in Real Estate? Found a home you love but ten others love it to? Work with your real estate agent to find creative ways to make your offer stand out from the rest. One of the best ideas is to offer the seller some extra time in the home after the closing, called a “rent-back”.
Ask the listing agent what the sellers plans are? Maybe they havent found a home yet and are asking for a quicker closing. Or maybe they have kids in school and prefer not to move too soon but all parties want to move the deal along instead of doing a three-month escrow? Frequently, the solution is that the buyer allows the seller to stay in the home after the close of escrow for a pre-determined amount of time. In return, the seller pays the buyer a pre-determined among for “rent.” This generally is the buyer’s monthly mortgage prorated for the amount of time the seller stays behind.
You might even consider offering the seller a “free” rent-back. Chances are, you won’t be moving the same day you close. And if you’re renting and your closing date is the middle of the month, you’ll probably have to pay both rent and mortgage for a short period of time. anyhow What could amount to zero extra expense to you could end up helping the seller in a significant way. Not being rushed out of the home and staying a while longer for free is bound to appeal to a seller faced with multiple offers at similar prices.