Sometimes it's helpful to sell your home before you really want to move. This often happens when you are having a new home built, but aren't sure of the completion date. 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. Yes, there is with the renting back strategy.
Enter 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, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.
The contract covering the scenario states the length of time the seller will continue to be. It can be done with a certain date named or wording that enables the seller to remain up to a particular date with the possibility of her relocating earlier. The quantity can be a repaired figure paid out of the profits of settlement or a regular monthly quantity, or a daily quantity. It is typically, but not always, tied to the amount of the home loan payment under the buyer's brand-new loan. Sometimes there is a deposit against damages, occasionally not. There is normally a clause saying the seller will hold the buyer safe for any damage to himself or his property which takes place after the sale is consummated and prior to 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've recently seen a very enjoyable example of this idea in action. An elderly widow contracted to have a one level condominium space built in a new community which provides all exterior maintenance. She had actually had hip replacement surgical treatment and wished to get away from the disadvantages of the home in which she had actually raised her children. The house was huge, had stairs and was found on a large, partially wooded lot with lots of mature perennials and shrubs. Both the home and garden were gorgeous, but high maintenance.
Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. The situation was competitive.
The widow responded to with a proposal that she "rent back" for a duration of " approximately" a specific date (a date past her scheduled competition date on the condominium) in exchange for a modest flat sum to be paid to the buyer at settlement. The overall lease back duration was less than 2 months. The flat fee was less than the quantity of the new home loan payment for the buyers. However, because they made no payment on their new home loan the first month, it wasn't too far out of line. The couple actually wanted the home, so they accepted the counter offer.
An additional succeed, win situation was created. The widow just needed to relocate one time and the young couple got a home they most likely would not have in a straight bidding war. If you find yourself in a situation just like either the widow or the young couple, possibly you can work out a comparable solution.
Enter 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, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.
The contract covering the scenario states the length of time the seller will continue to be. It can be done with a certain date named or wording that enables the seller to remain up to a particular date with the possibility of her relocating earlier. The quantity can be a repaired figure paid out of the profits of settlement or a regular monthly quantity, or a daily quantity. It is typically, but not always, tied to the amount of the home loan payment under the buyer's brand-new loan. Sometimes there is a deposit against damages, occasionally not. There is normally a clause saying the seller will hold the buyer safe for any damage to himself or his property which takes place after the sale is consummated and prior to 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've recently seen a very enjoyable example of this idea in action. An elderly widow contracted to have a one level condominium space built in a new community which provides all exterior maintenance. She had actually had hip replacement surgical treatment and wished to get away from the disadvantages of the home in which she had actually raised her children. The house was huge, had stairs and was found on a large, partially wooded lot with lots of mature perennials and shrubs. Both the home and garden were gorgeous, but high maintenance.
Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. The situation was competitive.
The widow responded to with a proposal that she "rent back" for a duration of " approximately" a specific date (a date past her scheduled competition date on the condominium) in exchange for a modest flat sum to be paid to the buyer at settlement. The overall lease back duration was less than 2 months. The flat fee was less than the quantity of the new home loan payment for the buyers. However, because they made no payment on their new home loan the first month, it wasn't too far out of line. The couple actually wanted the home, so they accepted the counter offer.
An additional succeed, win situation was created. The widow just needed to relocate one time and the young couple got a home they most likely would not have in a straight bidding war. If you find yourself in a situation just like either the widow or the young couple, possibly 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 Condo (http://www.condosphilippines.org/listings/arista-place/). For Other DMCI Homes Project you may visit Philippines Best Condominiums(www.condosphilippines.org)
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