How Do Rent-Backs Work?
Here’s how rent-backs are being used by homebuyers in today’s market.
I was recently asked by a seller about rent-backs and how they work. I’m taking just a moment of your time today to explain that important process.
A rent-back is when a homebuyer agrees to let the home’s previous owner continue to live in the property for an agreed-upon time frame after the sale has closed. A rent-back can last anywhere from one to 60 days. If someone is buying your property in cash, a rent-back can last even longer.
Rent-backs benefit sellers by giving them a little more time to get their future housing plans in order. That’s one of the main reasons we’re seeing more rent-backs these days. If a home seller also needs to buy, they’ll likely need the proceeds from the sale before they can make a strong offer. Giving them just 60 days can make a difference. It's not uncommon for buyers to offer a free rent-back in this market because things are so competitive.
For buyers, a rent-back can benefit you by bringing a little bit of extra income and having the seller pay rent to cover your mortgage costs. It can also make the difference in getting your offer accepted when competing against multiple other buyers.
If you have questions about rent-backs, how they’re being used in this market, or anything else related to real estate, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.