I’m Selling the Home, But I Really Need to Stay

Posted on Posted in Buyer, Education, Listng Your Home, Real Estate, Seller, Selling Your Home

Sometimes it’s helpful to sell your home before you really want to move. Wait a minute. How could this happen? It usually happens when you are having a new home built; however, the completion date is not known or in constant flux. So, this seller is unique in that they have two major needs that usually conflict with each other:

  1. They need to sell their home to ensure the funds are available for the new purchase.

  2. They need to continue to live in their sold home until construction of the new one is complete.

So what is the solution? The Lease-Back or Rent-Back Agreement.

The particulars of this strategy vary from state to state, but in the strong seller’s market we’re experiencing, sellers are often considering multiple offers from potential buyers. Some buyers will be open to considering to allow the seller stay in the home for an extended period of time as long as rent is paid and their offer is accepted instead of being turned down.

The purchase agreement covering the situation should state the length of time the seller will remain.  It can be done with a specific date named or wording that allows the seller to remain up to a specific date with the possibility of him/her moving sooner. The amount for rent can be a fixed figure paid out of the proceeds of settlement or a monthly amount, or a daily amount. I would suggest to put in the purchase agreement that the seller will place a set sum of funds for the entire period the seller remains in the home into an escrow account at/prior to closing. Furthermore, the purchase agreement should inform all parties when the buyer will  be paid rent from the escrow account: weekly, biweekly, or monthly for rent. The buyer may want to ask for a damage deposit. Finally, the buyer should have in the purchase agreement a clause saying the seller will hold the buyer harmless for any damage to himself or his property which occurs after the sale is consummated and before the seller moves.

The great thing about this strategy is it creates a win, win situation for both parties involved in the sale. The seller only has to move one time and the buyer got a house they probably wouldn’t have in a straight bidding war. If you find yourself in a situation where you need to sell, but stay in the home, please contact me at mmorrison@cbwm.com or you can go to http://marvinmorrisonrealtor.com on your cell phone and click the green button at the bottom of the screen and your phone will call me at 248-657-4006.