When you are buying a hill country home, you will typically receive possession of the house on the day you close, unless you work out other arrangements. If the person selling the house is not yet ready to move out, for whatever reason, you could always offer to do a leaseback. Here are several things about leasebacks in this situation.
What is a leaseback?
A leaseback is a term used to refer to renting the house back to the seller after closing on the house. If the seller, for example, is building a house and the house will not be ready for another month, the seller might ask you if he or she can stay living there for an extra month. If you agree, the seller would agree to pay you a certain amount of money per month to "rent" the house from you. This is a leaseback.
What are the benefits of a leaseback?
Leasebacks are not extremely common, but they do happen in some situations. There are few benefits of leasebacks for the person buying the house, but there are some benefits for the seller. The main benefit the seller will experience is being able to avoid having to do a temporary move. In the example above, the seller would have to move somewhere for only one month in this situation. Moving somewhere for one month is very frustrating and hard to do. Because of this, the seller would greatly benefit if he or she could stay living in the house for the extra month so that he or she could avoid this temporary move.
How do you go about doing a leaseback?
If you decide to offer a leaseback to the seller of the house, you will need to get everything in writing. In other words, you will need a contract. This contract should state the amount of the rent the seller would pay, the seller's responsibilities with the house and the approximate length of time the leaseback will occur. After creating the contract, both parties would need to sign it, and this would make the contract a legal agreement.
Offering a leaseback is not always an option in these situations, and it might not be what you want to do when you are buying a house, but you really have nothing to lose if you do. If you have questions about this or other real estate topics, you should ask a real estate agent.
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