Seller wants to rent for few months after the closing
- Thread starter NeedHome
- Start date
NEW -> Contingent Buyer Assistance Program
I can't help but notice your user name is **NeedHome**. When you asked if this is "safe", I wondered how firmly you need this home. Run worst-case scenarios through your head and ask if that's an acceptable risk for you personally at whatever stage in life you're at right now. I had a pretty unfavorable experience with a rent-back. Bought the house. Sellers wanted to rent back for a few months. We signed an agreement. "Move out" day came... and went! They refused to move. I was now 9 months pregnant, suffering & ready to pop!! I wanted them out of my house because I really "needed" it immediately by this point. It was very stressful. They finally moved out late, being real jerks about it in the process, even had the gall to stand there arguing with me in the house, getting all up in my face while I was in the middle of having contractions. Crazy people! All of a sudden they wanted things paid for that I never agreed to like they wanted me to pay the remainder of their house alarm contract and other things they hadn't thought of during escrow, which was long past at this point. They caused some damage to the home moving out. They admitted they were angry because the house appreciated a good amount during the time they rented back from me and wish they would have gotten more money in their pockets. That's right, it did, because I timed it well. TooBadSoSad! It's like they were trying to "get revenge". I regret this experience. For me, personally, I would avoid a rent back if you truly "NEED HOME". However, even after all that, I still view it as a necessary evil of negotiations, depending on how greatly you want that house. Sometimes you gotta roll with it.
sheesh.. what a crazy story.
I imagine that you can protect yourself from some of this with a rock solid lease and a hefty deposit. You can't protect yourself from rude people though.
You may be able to get some of the earnest deposit out of it depending on the reason but isn't getting the house more important?
agree, no need expose yourself to interest rate risk. if i was a buyer i would tell the seller to fuck off. im already paying you a shitload of money, take it, pack your shit and get the fuck out.
for $100/hour i can negotiate with sellers on your behalf to ensure they move out COE +3 days or even on COE.
We are in a neutral market right now so buyers can certainly be a lot more demanding. The question is: how much is his wife set on this one house in particular?
usctrojancpa
Well-known member
+1 Ask for a refundable security deposit if you are concerned that they'll mess up the house.eyephone said:
socal78
Well-known member
NeedHome said:
I can't help but notice your user name is **NeedHome**. When you asked if this is "safe", I wondered how firmly you need this home. Run worst-case scenarios through your head and ask if that's an acceptable risk for you personally at whatever stage in life you're at right now. I had a pretty unfavorable experience with a rent-back. Bought the house. Sellers wanted to rent back for a few months. We signed an agreement. "Move out" day came... and went! They refused to move. I was now 9 months pregnant, suffering & ready to pop!! I wanted them out of my house because I really "needed" it immediately by this point. It was very stressful. They finally moved out late, being real jerks about it in the process, even had the gall to stand there arguing with me in the house, getting all up in my face while I was in the middle of having contractions. Crazy people! All of a sudden they wanted things paid for that I never agreed to like they wanted me to pay the remainder of their house alarm contract and other things they hadn't thought of during escrow, which was long past at this point. They caused some damage to the home moving out. They admitted they were angry because the house appreciated a good amount during the time they rented back from me and wish they would have gotten more money in their pockets. That's right, it did, because I timed it well. TooBadSoSad! It's like they were trying to "get revenge". I regret this experience. For me, personally, I would avoid a rent back if you truly "NEED HOME". However, even after all that, I still view it as a necessary evil of negotiations, depending on how greatly you want that house. Sometimes you gotta roll with it.
J
jmoney74
Guest
SoCal said:
sheesh.. what a crazy story.
paperboyNC
New member
SoCal said:
I imagine that you can protect yourself from some of this with a rock solid lease and a hefty deposit. You can't protect yourself from rude people though.
It's all negotiation.
They are looking to minimize their inconvenience.
In this market, it's probably not a deal breaker for the seller.
They may need to find a short term rental if your refuse.
I'd price in the risk/inconvenience and make it part of the deal (beyond the PITI equation).
They'll either pay or find another solution.
They are looking to minimize their inconvenience.
In this market, it's probably not a deal breaker for the seller.
They may need to find a short term rental if your refuse.
I'd price in the risk/inconvenience and make it part of the deal (beyond the PITI equation).
They'll either pay or find another solution.
furioussugar
New member
How long do they want to rent back? Can you negotiate a longer escrow -say 90 days then a 30 day rent back? So a total of 4 months but less hassle from the lender, etc and more control for you as your final walk through would be later in the timeline and they would be "renters" for a shorter period?
Funny you ask this question, as my younger sister asked me that about a few weeks ago. I told her that if she and her husband loves the house then go for it and just make sure you draw up a detail contract on the rent back terms. It is competitive purchasing a home in Irvine if you're not an all cash buyer, which they aren't, so if they can be more flexible they may be more likely to get accepted. My sister made the offer awhile ago and they still haven't agreed on the terms of pricing and rent back. (I suppose she didn't take my advice on being more flexible, haha).
irvinehomeowner
Well-known member
One problem with a longer escrow is something could go sideways and you lose your house.furioussugar said:
You may be able to get some of the earnest deposit out of it depending on the reason but isn't getting the house more important?
qwerty
Well-known member
irvinehomeowner said:
agree, no need expose yourself to interest rate risk. if i was a buyer i would tell the seller to fuck off. im already paying you a shitload of money, take it, pack your shit and get the fuck out.
for $100/hour i can negotiate with sellers on your behalf to ensure they move out COE +3 days or even on COE.
paperboyNC
New member
qwerty said:
We are in a neutral market right now so buyers can certainly be a lot more demanding. The question is: how much is his wife set on this one house in particular?
We just sold our Northwood home after 22 years and asked for a rent back because we were buying a Probate house and so the closing date would be unpredictable. We had 5 offers in 3 days and made that part of the negotiation. You want our house you agree to rent back. It was all written up in escrow instructions and we agreed to leave money in escrow for the rental deposit. We also paid ahead for 30 day rent back from escrow. If the owners have kept up the house well and taken good care of it that will be a good indicator of how they will maintain the home will renting back. It's still a sellers market, so you might have to agree to their terms if you want the house. They will find someone who will agree, it's not unusual these days.
irvinerealtor
Well-known member
Reiterating some of the most relevant tidbits from this thread and adding my own .02c:
1. If you are the buyer, CONFIRM WITH YOUR LENDER that the requested leaseback period is acceptable. As SGIP accurately pointed out, many lenders have strict guidelines that will either hamper your transaction from closing altogether, or will charge you a hefty risk premium as they may consider your purchase as an investment property rather than a primary residence.
2. CAR form RLAS (Residential Lease After Sale) is your friend. This spells out the terms, monthly rate, deposit amount, insurance requirements, and billing info (who pays the gardener/alarm/utilities, etc.?). It also spells out the terms if the contract is broken, to protect against SoCal's experiences.
3. Typically the leaseback rate is the HIGHER of the PITIA (principle, interest, taxes, insurance, and association costs) or the market rent for the area. If you're paying, for instance, ~50% down payment, your PITIA costs may be significantly lower than market rental rate.
4. The practice IS very common locally.
5. Buyers get keys/access on the date of COE, in case an emergency does come up, as they are the owners as of that date.
Congratulations and good luck,
-IrvineRealtor
1. If you are the buyer, CONFIRM WITH YOUR LENDER that the requested leaseback period is acceptable. As SGIP accurately pointed out, many lenders have strict guidelines that will either hamper your transaction from closing altogether, or will charge you a hefty risk premium as they may consider your purchase as an investment property rather than a primary residence.
2. CAR form RLAS (Residential Lease After Sale) is your friend. This spells out the terms, monthly rate, deposit amount, insurance requirements, and billing info (who pays the gardener/alarm/utilities, etc.?). It also spells out the terms if the contract is broken, to protect against SoCal's experiences.
3. Typically the leaseback rate is the HIGHER of the PITIA (principle, interest, taxes, insurance, and association costs) or the market rent for the area. If you're paying, for instance, ~50% down payment, your PITIA costs may be significantly lower than market rental rate.
4. The practice IS very common locally.
5. Buyers get keys/access on the date of COE, in case an emergency does come up, as they are the owners as of that date.
Congratulations and good luck,
-IrvineRealtor