What is a temporary leaseback? How does it work?
What is a temporary leaseback?
A seller leaseback, also called a sale leaseback or rent back, is a transaction in which the seller sells the property and then leases back the property from the new owner.
Why would I need a leaseback?
The Seller’s temporary lease is used when a seller needs more time after closing to vacate the property. This could be for any number of reasons. Some examples are: Needing more time to move possessions
- Waiting on a new house to be built
- Needing funds from the sale of their house to close on another on another house on a different date
- Needing funds from sale of house to pay for moving expenses
- Wanting to wait until the school year ends.
- How long can I have a leaseback for?
A Seller’s Temporary Lease allows the seller to continue living in the home after closing for a short time anywhere from one to 90 days.
How much does a leaseback cost?
This Lease assigns a set daily rental rate and a security deposit amount. The daily rental rate is negotiable and could be as small as $1 a day for just a couple of days. However It is more commonly calculated by looking at what it is costing the buyer per day that they are paying for a home they’re not yet occupying.
What form do I use?
The Texas Real Estate Commission has a form specifically for a temporary leaseback when selling your home. An example of the form is below:
The TREC Seller’s Temporary Residential Lease form is a simple, two-page document used only when the seller occupies the property for no more than 90 days after closing the purchase. Buyer and seller agree in writing to the rental amount, deposit required and other details like who pays the utilities.
The lease starts when the sale is closed and funded. It ends on a specific date listed on the form. In this lease, the seller becomes the tenant and the buyer becomes the landlord. For the most part, standard tenant/landlord rules apply. Typically, the entire amount of rent and deposit is paid by the seller upfront at closing and credited to the buyer on the settlement statement. It is usually handled by the title company.