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Sale/Lease Back

3,525 Views | 31 Replies | Last: 4 yr ago by case04
paula90
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Are these becoming the norm?

We got the loan in place and we went to see a house last night. We were ready to put in an offer and found out that the sellers needed 3 days after closing to move. Hubby is a lawyer. Before I was married, I owned rental property for about 10 years. We said no way, we are walking away. Our realtor in Tyler stated we may have a hard time finding a house that we can gain possession of at close. We are looking in the 250K range.
DallasAggie0
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You said no way for just 3 days?
Deats99
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AG
Do what you are comfortable with, but I see these quite often. What are your main concerns/fears?
A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton
Ol Jock 99
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AG
Holy unnecessary information Batman!

They have every right to ask.
You have every right to say no.
I can't imagine losing a property over 3 days.
aggiepaintrain
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AG
when I sold my prior home I did a lease back for a ..... month

A lease back is fairly common and 3 days is totally reasonable
dallasiteinsa02
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I am not buying a property with a lease back to the sellers. It has too much risk for my tastes. I understand that they don't want to move until the deal is done. I have always offered significant escrow deposit for them to get out prior to closing. It has worked every time.
paula90
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We have a LOT of concerns. They could be injured on property, damage property, not move out as agreed, moving company could damage the house or yard, and moving company employee could be injured. Also, insurance coverage between closing and us taking possession.

dubi
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AG
Why not delay closing a few days so they have more time to get out?
one MEEN Ag
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AG
dubi said:

Why not delay closing a few days so they have more time to get out?
Because its probably not about the absolute number of days until closing, but the sellers want to only pack up the house if closing is a 100% sure happening.
Mike92
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AG
dubi said:

Why not delay closing a few days so they have more time to get out?
I'm the husband here. We would have no problem with delaying closing. The problem is that they don't want to move before closing regardless of the closing date. I suspect they need the funds from closing to pay for the move. We later found out he works for a bank (and is a t-shirt sip with Bevo crap everywhere and an autographed picture of Vince Young).
Ol Jock 99
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AG
Personally, I think y'all are worrying too much, but if you are dead set on it, upping the escrow isn't a terrible idea.
Mike92
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AG
I'll have to keep the increased escrow idea in mind for the future. How exactly would it work? Would the seller receive the escrow a certain number of days before closing?
DallasAggie0
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paula90 said:

We have a LOT of concerns. They could be injured on property, damage property, not move out as agreed, moving company could damage the house or yard, and moving company employee could be injured. Also, insurance coverage between closing and us taking possession.




Doesnt TREC have a freely available lease contract that covers all these things?
Red Pear Realty
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Sponsor
AG
one MEEN Ag said:

dubi said:

Why not delay closing a few days so they have more time to get out?
Because its probably not about the absolute number of days until closing, but the sellers want to only pack up the house if closing is a 100% sure happening.

BINGO. I'm seeing this more and more from sellers.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
SteveBott
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AG
Very common nowadays
expresswrittenconsent
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Oh wait, he has a VY autograph pic? That does complicate things.
dallasiteinsa02
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On the increase escrow, you put enough down to cover the move out and move back in. If they dont have the capital to move, tell them to put it on a credit card. I am not going to be a landlord on my future primary residence. There are about a thousand things that could go wrong.
jja79
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AG
The Closing Disclosure has to be signed 3 business days prior to closing and funding. That should alleviate some of that concern.

AggieAces06
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AG
When we sold 10 years ago we did a one week lease back because we couldn't close on our new property before then. Wrote the new owners a $1000 check as a "deposit". We kept our homeowners coverage intact until we moved.

I don't see the issue. Ask them for a deposit check. If they damage the property, cash the check, if they don't, tear it up.

If they have taken care of the property for this long, I doubt they will have any reason to tear it up 3 days after selling it.
jja79
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AG
Is homeowner's coverage valid once you're a tenant and not the homeowner?
AggieAces06
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AG
jja79 said:

Is homeowner's coverage valid once you're a tenant and not the homeowner?

I'm not sure... I guess I'll clarify that I don't fully remember what we did (since it was 10 yrs ago) but I don't think we took out a renter policy for just one week. I assume we left the homeowner policy in place until we moved and then started a new policy on the new property.

I don't see any reason that the new owner couldn't take out a policy as well. But I'm not a realtor or a lawyer, so I may have no idea what I am talking about.
Charlie Murphy
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paula90 said:

We have a LOT of concerns. They could be injured on property, damage property, not move out as agreed, moving company could damage the house or yard, and moving company employee could be injured. Also, insurance coverage between closing and us taking possession.




In 3 days?!
A_Gang_Ag_06
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AG
AggieAces06 said:

When we sold 10 years ago we did a one week lease back because we couldn't close on our new property before then. Wrote the new owners a $1000 check as a "deposit". We kept our homeowners coverage intact until we moved.

I don't see the issue. Ask them for a deposit check. If they damage the property, cash the check, if they don't, tear it up.

If they have taken care of the property for this long, I doubt they will have any reason to tear it up 3 days after selling it.
We've done the exact same thing twice. Both times it was because were relocating for my job and our house sold quicker than expected. Needed a lease back until the end of school for my kids. I don't see the big deal. There are ways to safeguard yourself.
Texker
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AG
We bought and sold last year and both transactions had leasebacks. Not a big deal, in fact it helped get both deals done and helped reduce cost and make the move a little less of a hassle.
DannyDuberstein
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AG
These are extremely common now, something like 1 in 4 sales. Obviously, like any decision, it comes down to balancing risk vs. reward, and we all have our own personal assessment of each. If it was a house you loved, got a good deal on, etc, it seems like being overly cautious to tank a deal over . The key is certainly in the details as far as putting together an ironclad leaseback agreement that protects you as much as possible, allows for a walk-thru's both at close and when possession changes, etc. But yes, you are technically going to be a landlord for a very short period of time and some risk comes with that. But that risk has to be balanced with the whole deal.
Garrelli 5000
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AG
We did this when we sold our home in Denver. We were moving back to Dallas and weren't about to risk moving only to have the sell not close, then we're stuck with an empty home in Denver. We were fine if it took 2 years to sell. Our employer was in Dallas and didn't care when we came back. It gave us 3 days to pack everything we'd left out for staging.
NCNJ1217
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AG
When we sold our house we negotiated a 1 or 2 week (I can't remember) lease back. Reason being was that we closed on our old and new house the same day, and naturally couldn't move all our stuff before that. It was handled very professionally by all parties (our realtor, title, cant remember if mortgage co was involved in that part of it).
"Merely having an open mind is nothing. The object of opening the mind, as of opening the mouth, is to shut it again on something solid."

-G.K. Chesterton
Texker
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jja79 re homeowners policy

No, you need to call your agent and give them contract dates. They will terminate your policy for day after closing and replace it with a renters policy.

Oh, and here's a link to what needs to be executed as an addendum to the contract.

https://www.trec.texas.gov/forms/sellers-temporary-residential-lease

It's 3 days. That's nothing. We leased back the house we sold for 3 weeks after close. We allowed the sellers to leaseback the house we bought for a week but they ended up vacating in 3 days.
FincAg
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AG
If I remember correctly, we did a 6 week leaseback to the owners of our house because
  • we closed end of July and our apartment lease was not up until the end of October;
  • we were going to get stuck with double housing costs anyway, whats a few thousand dollars when you're talking hundreds of thousands of dollars.
  • they were within weeks of completing the build on their new home and had two small children
  • they threw in a new roof
  • gave us the fridge, baby crib, and rocker/glider: we were expecting our first child November 2nd
  • we offered asking price the hour it hit MLS in a very tight market and were one of the lower bids

The lease agreement looked to cover most all of your/our concerns. And we had a great Aggie realtor who we trusted and he did not think it was a bad idea.
SoTheySay
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S
Realtor here - personally leased mine back for a month. It's not uncommon at all.
Alta
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Wow - never heard of people reacting this way to a lease back. We did one for several months when we sold our first house and if I could accommodate it for a seller I wouldn't hesitate to do it when buying a house.
kyledr04
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When I sold my last house I said I would give preference to offers that allowed a leaseback. First offer had leaseback for the time I needed for free plus more than asking. Helps to have a house in an area with high demand.
case04
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AG
jja79 said:

Is homeowner's coverage valid once you're a tenant and not the homeowner?
I see a lot of my clients buying properties with the sellers staying in the house for up to a month, its not super uncommon. Most of my carriers don't have an issue with this.
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