RENTING BACK MY WASHINGTON DC HOUSE AFTER I SOLD IT?
Sometimes it is helpful to sell your home before you really want to move. This often happens when you are having a new home built, but are not sure of the completion date. The other instance is if you are going through foreclosure and you sell your house but have not found another place to live yet.
Is there any way you can sell your home so you are sure the funds are 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 with the buyer of your Washington DC area property.
In a strong seller’s market, 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 market, the buyer who is willing to do this will often have the winning bid even though there might be another offer as high as his.
The agreement covering the situation states the length of time the seller will remain at the residence. 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 her moving sooner. The amount can be a fixed figure paid out of the proceeds of settlement or a monthly amount, or a daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer’s new loan.Often times there is a deposit against damage. There is usually 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.
An elderly widow contracted to have a one level condo unit built in a new community which provides all exterior maintenance. She had had hip replacement surgery and wanted to get away from the drawbacks of the home in which she had lived in for over 30 years and raised her children in. The home was large, had stairs and was located on a large, partially wooded lot with many mature perennials and shrubs. Both the home and garden were beautiful, 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. A young couple with two sons was very anxious to buy it. The situation was competitive. They made the widow an offer. She countered their original offer. She did not raise their offer price, which was slightly below her asking price. She did not believe the young couple would qualify for a larger loan. Instead, she did something rather creative.
The widow made a counter offer which included a proposal that she rent back for a period of time (a date beyond her scheduled competition date on the condo) in exchange for a modest flat fee to be paid to the buyer at settlement. The total rent back period was less than two months. The flat fee was less than the amount of the new mortgage payment for the buyers. However, since they made no payment on their new mortgage the first month, it was not too far out of line. The couple really wanted the home, so they accepted the counter offer.
Another win, win situation was created. The widow only had to move one time and the young couple got a house they probably wouldnít have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, perhaps you can work out a similar solution.