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From someone who is selling his house and is doing a rent back for thirty days:
When we put our house up for sale in Virginia, where rent backs are quite common, my wife and I decided we would not accept an offer that would not give us a thirty day rent back option. To much risk that something would go wrong and the closing would be cancelled due to contingencies such as inspections, appraisal, or financing. We plan to rent for awhile and didnot want to sign a lease at an apartment for the day we closed on the house and then have a problem at the last minute and have our home empty and stale. If the sale was cancelled for some reason at the last minute we would be forced to pay rent and a mortgage at the same time; have our furniture sitting in our new apartment while our house that we are now forced to put back on the market is empty of funiture. It sold much easier full of nice furniture including nice things from the staging company.
We insisted on a full thirty days in our rent back arrangement which gives us lots of time to find an apartment rental. A short rent back would not allow us to look for a nice place to live. I can't see looking at apartments when I don't know if the closing is actually going to happen. Also the thirty day rent back allows us to get the profits out of our house into our bank account to fund the first and last months rent and security deposit. We would not have that money until we got our home proceeds.
From a sellers perspective a rent back is the only way to go.
From someone who is selling his house and is doing a rent back for thirty days:
When we put our house up for sale in Virginia, where rent backs are quite common, my wife and I decided we would not accept an offer that would not give us a thirty day rent back option. To much risk that something would go wrong and the closing would be cancelled due to contingencies such as inspections, appraisal, or financing. We plan to rent for awhile and didnot want to sign a lease at an apartment for the day we closed on the house and then have a problem at the last minute and have our home empty and stale. If the sale was cancelled for some reason at the last minute we would be forced to pay rent and a mortgage at the same time; have our furniture sitting in our new apartment while our house that we are now forced to put back on the market is empty of funiture. It sold much easier full of nice furniture including nice things from the staging company.
We insisted on a full thirty days in our rent back arrangement which gives us lots of time to find an apartment rental. A short rent back would not allow us to look for a nice place to live. I can't see looking at apartments when I don't know if the closing is actually going to happen. Also the thirty day rent back allows us to get the profits out of our house into our bank account to fund the first and last months rent and security deposit. We would not have that money until we got our home proceeds.
From a sellers perspective a rent back is the only way to go.
I would have to be out of my mind completely in love with your house to agree to a 30 day rent back I understand your reasoning but that is waayy to much risk to a buyer.
When I sold my house, the buyer gave me 3 days to move. That is common in my area. I could not take possession or get the key at closing. I had to wait until the money transferred over. Depending on the time of the closing, the transfer could happen later in the day or the next day! According to my realtor, no one should move out or in until after the funding was done. I was able to move into the new house the next day. Since I no longer owned my old house, I wanted to move out asap.
I would have to be out of my mind completely in love with your house to agree to a 30 day rent back I understand your reasoning but that is waayy to much risk to a buyer.
When I sold my house, the buyer gave me 3 days to move. That is common in my area. I could not take possession or get the key at closing. I had to wait until the money transferred over. Depending on the time of the closing, the transfer could happen later in the day or the next day! According to my realtor, no one should move out or in until after the funding was done. I was able to move into the new house the next day. Since I no longer owned my old house, I wanted to move out asap.
It's not much risk for the buyer, if the right contracts are used. It's more a matter of preference, options, and willingness to cooperate when you get right down to it.
So in areas where longer rent backs are common, what happens when something big breaks down in the house? For example the water heater dies or the furnace? Is it treated like a LL/tenant situation where the buyer now is on the hook to get it replaced right away?
So in areas where longer rent backs are common, what happens when something big breaks down in the house? For example the water heater dies or the furnace? Is it treated like a LL/tenant situation where the buyer now is on the hook to get it replaced right away?
Look - we're talking about very low odds of this happening, to begin with. The vast majority of sellers maintaining possession I ever dealt with were 2-3 days max. Nothing EVER happened. But my gosh, if a furnace went out in that two day period - it would have gone out anyway, with the new buyers in the house. Same with the hot water heater or most other scenarios like that. In those cases, yes, it would be up to the buyer to replace it - just as it would have been up to the buyer to replace it if they'd been living in the home.
Not common in our area at all due to the legal issues. Apparently in Kathryn's area the sellers can destroy the property and expect the buyer to pay for those repairs. I guess that's why I don't live in Texas.
The buyer needs to get a landlord policy for their new house that is now being rented out to the seller-tenants. That new insurance policy should have the new mortgage company as an additional insured party. So now the insurance company contacts the lender to let them know that a new policy has been taken out, and technically, the buyers are in violation of the terms of their mortgage which requires them to owner-occupy the property.
Our state has some pretty liberal policies with respect to evicting tenants. So if the sellers don't want to move out in time, the eviction process could easily take a few months. During that time the buyers would have to find replacement housing which just might make them not be able to afford their new mortgage.
There's the issue of things breaking in the house. Even if something goes out 'naturally', the seller is still going to be accused of breaking it. So now the buyer and seller are going to have problems with each other over the condition of the property.
The better way to do things is to have a longer period of time in between the mortgage contingency and closing date. Also get enough earnest money from the buyer so that they would really take a financial loss if they backed out of the transaction. That large amount of earnest money could also be used as damages payable to the seller. That's a much better way to sell a house than to stick around after closing.
I imagine that the people who do this sort of thing have never thought through the problems and probably not thought of the terms of the mortgage that they signed nor thought of the insurance issues.
So in areas where longer rent backs are common, what happens when something big breaks down in the house? For example the water heater dies or the furnace? Is it treated like a LL/tenant situation where the buyer now is on the hook to get it replaced right away?
Exactly! That is why eventhough by buyer gave me 3 days to move, I wanted to move out and turn over possession asap for that very reason.
As for cooperating, sure we all want to and its sure is easy to say. But I would not trust a seller to take care of and to the make whatever repairs in a 30 days lease back. Just asking for a headache IMO.
The more likely scenario with the condition issue is that something just breaks due to it wearing out and not a problem with the seller abusing it. That puts both parties in a bad situation. The seller attempts to let the buyer know that they had nothing to do with the defect, and the buyer won't belive them. So even decent people can run into problems in a post closing possession issue.
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