Do you have a feeling like you’re not quite ready to vacate the home you’re selling? If you’re working with a real estate investor, one of the things you might want to consider is a rent-back agreement.
If you’re in process of buying a new home while selling your old one to a real estate investor, you should consider asking for a rent-back agreement. As you’re probably already guessing, double transaction such as this one might take some time, and you may find yourself closing the sale of your property, while still waiting for the home purchase to end. This situation might require you to pay to stay in a hotel, or to couch surf at your friend’s place. This might be fine if you’re alone; however, if you have a family, none of these options is good enough.
This is a great way to ensure you have some extra time after selling your house in Milwaukee. It will give you enough time to find a place to stay, while you try to find a new home, or wait for your purchase to be completed. This agreement can have a limited time frame, but it’s a better option than to stay in a hotel or to end up in the streets.
What Is a Rent-Back Agreement and How It Works
A Rent-back agreement is a legally binding document created between the buyer and the seller – usually the direct buyer. This agreement allows the seller to become a tenant in his former property, for the limited amount of time. In other words, if you have sold your house but aren’t prepared to move, you can ask a real estate investor that you sold your house to if you can stay inside your property for a certain time frame – for a fee.
In such an agreement you should decide on how long you can stay in your old property, as well as the amount of rent you’ll have to pay. A good advice would be to look at comparable homes for rent in local Milwaukee area. You might also be liable to pay a refundable deposit, just like if you were a regular tenant. Even though you lived and owned the home, some damages might happen. As the new owner already bought the home, the only rightful option would be to make you liable for any repairs that occur after the ownership has been transferred.
Rent-back agreements are usually signed before the sale is closed. Once it is signed, you can proceed with the closing of the sale. If there is a deposit, you will pay it at the date of the closing, and you can remain in the property.
What This Means for the Seller
This agreement is a great option for a seller who didn’t manage to find a new place to stay at the moment of sale. This enables you to stay calm for a little while, until you have resolved this.
Keep in mind, though, that this kind of a deal doesn’t last for very long. Most rent-back agreements last no longer than 60 days. However, we at Sparks Property Investors LLC will be ready to discuss all the ways to help you make your move as comfortable as possible. There is no reason why you should make this event more stressful than it already is.
What This Means for the Buyer
Most traditional buyers look for a house they can move into right away. This is why a rent-back document is typically an option when you’re selling to a reliable direct buyer in Milwaukee, such as Sparks Property Investors LLC. Direct buyers aren’t looking for a house to live in, but rather for a property they can rent out or flip later. This is why we are more flexible with the closing dates and rent-back agreements than traditional buyers. If the buyer doesn’t need to move in right away, you can make compromises about your vacating date. Just make sure everything is written on the paper beforehand!
Should you ask for a rent-back agreement? The choice is up to you. If you don’t have a place to stay, and you can’t delay the sale, asking to rent your own property is a good option. It is especially great if you have children or a large family, and paying for a hotel is too expensive. Not to mention that it isn’t safe anymore to just stay at unreliable places. No home is safer than your own, as only there you can be certain everything is disinfected and clean.
Of course, rent-back agreements have some downsides. You will become a tenant in your former property, and you will be liable for any damages. If you break something, you will probably stay without a refund for your deposit. Not to mention that you’ll have to pay rent! However, this is probably the best option you have if you still haven’t found a new place to live in.