After listing your house, you may find yourself in a major bind if you sell it a lot faster than you had expected. This may cause you to have to move faster than you wanted to, and you might not be prepared for this quite yet. If this happens, you could talk to the buyer about using a rent-back agreement to allow you to stay in the house for a period of time after the sale goes through. Here are three important things to know about rent-back agreements when selling your home.
A rent-back agreement is like a rider or contingency
A rider, sometimes called a contingency too, is something that is added to a real estate agreement that creates a rule, so to speak, about a certain aspect of the home sale. In this case, a rent-back agreement would allow you to stay living in your home for a certain amount of time after you sell the home.
How this agreement works
To use a rent-back agreement, several things must be discussed and agreed upon between you and the buyer of the house. This will include the following details:
- The maximum amount of time you can stay living there – If you only need 30 days, you can use this time frame on the contract. If you are not sure how much time you will need, you may want to push for the buyer to agree to a much longer time frame, such as six months.
- The amount of money you will pay – The agreement should also state a daily, weekly, or monthly rate of money you must pay to do this. The amount will usually be more than enough to cover the new owner's mortgage payment.
- Any other stipulations – You may also agree that you will repair certain things in the house, or that you will pay for any damage that is done during this time frame.
The benefits this can offer both parties
A rent-back agreement can be great for both parties, as long as both parties benefit from it. For you, the seller, you can benefit by having the ability to stay in your home for a while. For the buyer, he or she will receive monetary compensation for your stay, and this typically is an amount that is very fair for him or her.
Selling a home too quickly is not the worst problem you can have. In fact, this is often considered a good problem for homeowners that want to sell, especially if they can work out a rent-back agreement with the buyers. If you have questions about this, talk to an experienced real estate agent in your neighborhood.
