This is a situation that comes up more often than you think, just last week this was going on with one of my sellers. She was concerned because the buyers wanted to go to settlement earlier than expected and they wanted to have her rent back the house at a cost equal to the buyers principal, interest, taxes and insurance (PITI) for 30 days before vacating.  Mary just wanted to wait the 30 days and then settle without having to pay the buyers to “rent her own home”. 

I explained to Mary that I always felt it was a good idea for a seller to get their money from the sale as soon as possible.  You just never know what might happen.  When you have been in the real estate business for 25 + years you tend to have seen thousands of cases and they do not all go well.  Sometimes a buyer loses their job, or gets injured or dies.  All of these events tend to delay or terminate real estate deals.  However, none of these events affect Mary and her money if they occur after settlement.  Sometimes weather is a factor.  It is better to be the renter if a storm knocks over a tree onto the roof.  The new owner then deals with the insurance company, the contractor bids, the repairs and the deductible cost.  It is also possible that the loving couple who has the contract on Mary’s home is having family problems and they start divorce proceedings prior to settlement.  Now the couple will not be buying together and they no longer qualify for that large mortgage needed to buy Mary out of her property.

If Mary gets her sale proceeds early, she can always invest the funds to make up for some of the rental payments to her buyers.  Whether Mary earns a little money on her proceeds or a lot of money, she at least has the proceeds and all of the various problems that can occur to her buyers need not worry her further.

If I can help you analyze a rent back opportunity, please e-mail me.

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