Renting Back After Your Home Is Sold
By Raynor James, Fri Dec 9th

Sometimes it's helpful to sell your home before you really wantto move. This often happens when you are having a new homebuilt, but aren't sure of the completion date. Is there any wayyou can sell your home so you're sure of the funds available forthe new purchase, but continue to live in your old home untilconstruction of the new one is complete. Yes, there is with therenting back strategy.

Enter the Lease-Back or Rent-Back Agreement

The particulars of this strategy vary from state to state, butin the strong seller's market we're experiencing, buyers willoften agree to let the seller stay in the home for a period oftime as long as rent is paid. In a competitive situation, thebuyer willing to do this will often have the winning bid eventhough there is another offer



as high as his.

The agreement covering the situation states the length of timethe seller will remain. It can be done with a specific datenamed or wording that allows the seller to remain up to aspecific date with the possibility of her moving sooner. Theamount can be a fixed figure paid out of the proceeds ofsettlement or a monthly amount, or a daily amount. It isusually, but not always, tied to the amount of the mortgagepayment under the buyer's new loan. Sometimes there is a depositagainst damage, sometimes not. There is usually a clause sayingthe seller will hold the buyer harmless for any damage tohimself or his property which occurs after the sale isconsummated and before the seller moves.

The attorney who draws up your contract offer can create such anagreement. If you're using online forms, you should be able tofind one for this situation. If you're working with a realestate broker, he or she can handle it for you.

An Example

I've recently seen a very pleasant example of this idea inaction. An elderly widow contracted to have a one level condounit built in a new community which provides all exteriormaintenance. She had had hip replacement surgery and wanted toget away from the drawbacks of the home in which she'd rearedher children. The home was large, had stairs and was located ona large, partially wooded lot with many mature perennials andshrubs. Both the home and garden were beautiful, but highmaintenance.

Her contract to purchase required a series of deposits and afirm indication as to her source of funds well before settlementon her new condo. The widow put her home on the market. A youngcouple with two sons was very anxious to buy it. The situationwas competitive. They made the widow an offer. She counteredtheir original offer. She did not raise their offer price, whichwas slightly below her asking price. She did not believe theyoung couple would qualify for a larger loan. Instead, she didsomething rather creative.

The widow countered with a proposal that she "rent back" for aperiod of "up to" a certain date (a date beyond her scheduledcompetition date on the condo) in exchange for a modest flat sumto be paid to the buyer at settlement. The total rent backperiod was less than two months. The flat fee was less than theamount of the new mortgage payment for the buyers. However,since they made no payment on their new mortgage the firstmonth, it wasn't too far out of line. The couple really wantedthe home, so they accepted the counter offer.

Another win, win situation was created. The widow only had tomove one time and the young couple got a house they probablywouldn't have in a straight bidding war. If you find yourself ina situation similar to either the widow or the young couple,perhaps you can work out a similar solution.

About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.

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