Hey everybody, it’s Stacie Duffy, your Denver Metro Real Estate resource. The question I wanted to answer for y’all today is, what is a rent back or a lease back? I get this question a lot, especially in a really fast-paced market because what happens a lot of times is if people are considering selling their home, they’re worried about, “If I sell it, then what? I’m not gonna be able to find a house fast enough to move into.” And it gives them a chance to close and pay off the loan on their current home and then, find and purchase a new home and do a single move ideally.
Sometimes that only means a couple of days of rent back. Sometimes that means, you know, 30 days, 60 days, most lenders are going to require if you’re buying a house and then renting it back. Most lenders are gonna require that you take possession within 60 days. So if you’re buying it cash or to have a different arrangement, obviously whatever you wanna work out isn’t a problem. But essentially what it is – let’s say you’re selling your house and your buyer who’s gonna buy your home says, “We’ll give you time to rent back.” And you go through the normal process, you close on your home, and then you essentially become the tenant. Since the new person has purchased your house, you pay rent or lease the property from the new owner.
Different states have different requirements and different forms for this. Here in Colorado, we have a post-closing occupancy agreement that your realtor can help you with. So ask them about that. And it’s a short term lease just to cover that up to 60 day period. If it’s anything longer than 60 days, that form isn’t applicable. So you’ll have to use a standard lease of some sort, or something that you work out with the new buyer of the property. But it really just gives you a chance to get a little bit of breathing room if you’re selling and rebuying or if you’re buying a home and you wanna compete and the seller needs some time, that’s a great way to stand out is to say, “Hey, if you need 30 days of rent back, I’m month to month on my apartment, I can give you that.” It really takes a lot of the pressure off of a seller to get out of their house and find a new place.
If you have more questions about this, I’d be happy to answer them. My contact information is on my website, so thanks so much for the time and have a great day.