Rent Back After Selling a Home
When you’re selling your home and you’re not able to move as soon as it sells, what are your options as a seller?
One solution to this problem in the State of California is a Rent Back.
What Does Rent Back Mean?
Rent Back means as soon as your property closes escrow, and you’re no longer the owner of the home, you will become a short-term tenant and the buyer will become a short-term landlord if the new owner agrees to rent the property back to you.
To rent the property back to you there are a variety of options that you can agree with the owner on including:
- You agree to pay the owner of the property the fair market value rent.
- You can agree to pay their costs for whatever their out the door payment is on their loan.
- You can agree to pay any terms that you both agreed to during the transaction.
The Key to Success with Rent Backs
As with any landlord-tenant transaction, the key to success with rent backs should be contingent on answering the following questions.
- What are the exact terms of possession?
- What is the rent going to be?
- Will there be late charges for not paying rent on time?
- Who is responsible for paying utilities?
- What are the entry rights the new owner has?
- Is the landlord or tenant responsible for maintenance?
- Should the tenant have renter’s insurance?
- Are there any other special terms deemed necessary by the landlord?
How Long Can You Rent Back?
If the property is an investment property you can rent the home for however long you and the owner agree to.
Let’s say that the property is going to be the owner’s primary residence, and there’s a loan involved, in this case the maximum amount of time you can rent the property back is 60 days because as per the buyer’s loan, they have to actually be living in the property within 60 days.