Renting Back After Your Home Is Sold
Sometimes it's helpful to sell your home before you really want to move. Is there any way you can sell your home so you're sure of the funds available for the new purchase, but continue to live in your old home until construction of the new one is complete.
Enter the Lease-Back or Rent-Back Agreement
The particulars of this method vary from one state to another, however in the strong seller's market we're experiencing, buyers will typically accept let the seller stay in the your home for a period of time as long as lease is paid. In a competitive circumstance, the buyer about to do this will often have the winning bid despite the fact that there is an additional offer as high as his.
The contract covering the circumstance mentions the length of time the seller will continue to be. It can be finished with a specific date named or wording that allows the seller to stay up to a specific date with the possibility of her relocating earlier. The quantity can be a fixed figure paid of the proceeds of settlement or a regular monthly amount, or a day-to-day quantity. It is usually, but not constantly, tied to the amount of the mortgage payment under the buyer's new loan. Often there is a deposit against damages, occasionally not. There is typically a clause stating the seller will hold the buyer safe for any damage to himself or his residential property which occurs after the sale is consummated and before the seller moves.
The attorney who draws up your contract offer can create such an agreement. If you're using online forms, you should be able to find one for this situation. If you're working with a real estate broker, he or she can handle it for you.
An Example
I have actually just recently seen an extremely pleasant some example of this idea in action. An elderly widow contracted to have a one level condominium space built in a new area which offers all outside maintenance. She had actually had hip replacement surgery and wished to avoid the drawbacks of the home in which she had actually reared her kids. The home was large, had stairs and was found on a big, partially wooded lot with numerous fully grown perennials and hedges. Both the your home and garden were lovely, but high upkeep.
Her agreement to purchase required a series of deposits and a firm indicator about her source of funds well prior to settlement on her new condominium. The widow put her home on the marketplace. A young couple with two sons was extremely anxious to buy it. The situation was competitive. They made the widow an offer. She countered their initial offer. She did not raise their offer rate, which was a little below her asking price. She did not believe the young couple would get a bigger loan. Rather, she did something rather creative.
The widow countered with a proposal that she "rent back" for a period of " approximately" a particular date (a date beyond her scheduled competition date on the condominium) in exchange for a modest flat sum to be paid to the buyer at settlement. The overall rent back duration was less than two months. The flat cost was less than the amount of the brand-new mortgage repayment for the buyers. Since they made no repayment on their new mortgage the first month, it had not been too far out of line. The couple truly wanted the your home, so they accepted the counter offer.
Another succeed, win scenario was produced. The widow just had to relocate one time and the young couple got a home they most likely wouldn't have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, maybe you can work out a comparable solution.
Enter the Lease-Back or Rent-Back Agreement
The particulars of this method vary from one state to another, however in the strong seller's market we're experiencing, buyers will typically accept let the seller stay in the your home for a period of time as long as lease is paid. In a competitive circumstance, the buyer about to do this will often have the winning bid despite the fact that there is an additional offer as high as his.
The contract covering the circumstance mentions the length of time the seller will continue to be. It can be finished with a specific date named or wording that allows the seller to stay up to a specific date with the possibility of her relocating earlier. The quantity can be a fixed figure paid of the proceeds of settlement or a regular monthly amount, or a day-to-day quantity. It is usually, but not constantly, tied to the amount of the mortgage payment under the buyer's new loan. Often there is a deposit against damages, occasionally not. There is typically a clause stating the seller will hold the buyer safe for any damage to himself or his residential property which occurs after the sale is consummated and before the seller moves.
The attorney who draws up your contract offer can create such an agreement. If you're using online forms, you should be able to find one for this situation. If you're working with a real estate broker, he or she can handle it for you.
An Example
I have actually just recently seen an extremely pleasant some example of this idea in action. An elderly widow contracted to have a one level condominium space built in a new area which offers all outside maintenance. She had actually had hip replacement surgery and wished to avoid the drawbacks of the home in which she had actually reared her kids. The home was large, had stairs and was found on a big, partially wooded lot with numerous fully grown perennials and hedges. Both the your home and garden were lovely, but high upkeep.
Her agreement to purchase required a series of deposits and a firm indicator about her source of funds well prior to settlement on her new condominium. The widow put her home on the marketplace. A young couple with two sons was extremely anxious to buy it. The situation was competitive. They made the widow an offer. She countered their initial offer. She did not raise their offer rate, which was a little below her asking price. She did not believe the young couple would get a bigger loan. Rather, she did something rather creative.
The widow countered with a proposal that she "rent back" for a period of " approximately" a particular date (a date beyond her scheduled competition date on the condominium) in exchange for a modest flat sum to be paid to the buyer at settlement. The overall rent back duration was less than two months. The flat cost was less than the amount of the brand-new mortgage repayment for the buyers. Since they made no repayment on their new mortgage the first month, it had not been too far out of line. The couple truly wanted the your home, so they accepted the counter offer.
Another succeed, win scenario was produced. The widow just had to relocate one time and the young couple got a home they most likely wouldn't have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, maybe you can work out a comparable solution.
About the Author:
Jocel Victorino is a property consultant of DMCI Homes Inc. A premier developer of resort-type condominiums in the Philippines. If you are currently looking for a good investment try Arista Paranaque (http://www.condosphilippines.org/listings/arista-place/). For Other DMCI Homes Project you may visit Philippines Best Condominiums(www.condosphilippines.org)
