Does the thought of packing up all of your precious belongings, scheduling movers, utility shutoffs, and wrangling the kids, pets, and spouse into a packed car send shivers down your spine? Is it made worse by the thought that you could go through all of that only to have the contract on your house go wrong at the last minute? To avoid making those last few days leading up to closing even more tense and stressful, consider this.
Sellers can request and negotiate to lease their home back from the new buyers after closing. There’s a simple two page form called the “Seller’s Temporary Residential Lease” that gets added to the contract and I must admit there have been times that it has been a true lifesaver. With this form, you negotiate a set per diem rental rate (commonly it’s calculated by taking the buyer’s new monthly payment and dividing by thirty, but it’s all negotiable) and possibly offer up a security deposit. Once everyone signs at closing and the deal funds, the buyers become the rightful owners of the property. And the old owners become their tenants. Standard landlord/tenant relationship rules apply and generally payment for the anticipated term of the lease is paid all at once up front. This leaseback can extend for a few days or a few weeks, just no longer than 90 days. So if the new home you’re purchasing isn’t quite ready or if you just want an extra few days of certainty before busting out the boxes, consider this as one more option in your real estate tool belt.
There is also a “Buyers Temporary Residential Lease” which is used when the buyer needs to move in before closing. It is not as common as there are some legal issues with doing this, but it can be used in a pinch.