You want to sell your house. You’ve been watching the market, and it recently doubled in price. You’re going to make a significant amount of money on your investment.
But the problem is that you haven’t found another place to live yet. How do you balance this process? You need to buy a new home and sell your own, but you need to have a place to live the entire time. One potential solution is a rent-back agreement.
Renting your own home
Essentially, this is part of the purchase contract. When you accept an offer from a buyer, you only do so under the stipulation that they will allow you to rent your own home back from them after the transaction.
Generally, you should specify how long you want to rent it for. For instance, maybe you say that you will sell your home today but only under the condition that you get to rent it for the next six months before you have to move out. This gives you time to find a new home, secure a loan of your own, carry out a home inspection and take all the necessary steps to buy another property.
In many cases, doing this means that you have to pay monthly rent to the new owner. But another solution may simply be to drop the price. If you were going to pay $2,000 per month to rent your house back for the next six months, you could also just take $12,000 off of the sale price to satisfy this requirement.
The key is to communicate clearly with all parties who are involved in this process. It’s important to know what legal steps to take when going through a complicated real estate transaction.