How common are rent backs in this market?

[Anonymous]

Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:Mortgage lenders will allow 60 days.

Oh brother why would you even tell your lender? That is ridiculous.

it's a rent-back, not a "rental". #hit happens. You start out intending to do a 30 day because you need to find a house. That 30 turns into 60 because you still can't find a home.

You can't not tell your lender. The provisions of the rent back are in the contract, which the lender gets. Are you saying the buyer should accept the seller arbitrarily extending it because they cannot find a house without any protection for the buyer after it's legally their house?

That's what we did when we sold. Was supposed to be a 30 day rent back and that was in the contract, Then we had to extend to 60 days, which turned into almost 90 days. We drew up a separate short term rental contract at the start of the 60 days and we got rental insurance. Nothing arbitrary about it. We kept in constant communication with the buyers and we continued caring for the home as if it was ours.

Why would the buyer agree to this? Don't they need to move in?

Because they are first time buyers and have flexibility.

This is the 1st PP above who rented back. Yes exactly - they were first time buyers and were in a month to month apartment lease so it worked for them, and thankfully for us.

[Anonymous]

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

This- withdrew an offer because of the "free rent " back. I am to pay a mortgage, my last month rent, move and cover your expenses. No.

[Anonymous]

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

Chill out, sellers have to pay 6% realtor fees, buyers don't. Buyers can also use a rebate realtor to get cash back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

This- withdrew an offer because of the "free rent " back. I am to pay a mortgage, my last month rent, move and cover your expenses. No.

The sellers have to pay 6% realtor fees, 3% is to buyers' agent. If you are smart, you could've used a rebate agent to get 2% for yourself.

[Anonymous]

Up to 2 months is common and fairly easy to get. More than that and it messes with the mortgage rate

[Anonymous]

Anonymous wrote:

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

Chill out, sellers have to pay 6% realtor fees, buyers don't. Buyers can also use a rebate realtor to get cash back.

Lol pretending like the sellers pay for anything is hilarious. The buyers pay for it all no matter whose end it is coming out of.

[Anonymous]

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

I can live with that. Doesn't bother me at all.

Do you really think that people do, or should, care? Why? It's a business transaction. What you're basically saying is that sellers should knock ~$10k off the price. "Oh, you'll pay $980k? Well, let's make it $970k, so you'll like me.

Grow up.

[Anonymous]

Anonymous wrote:We are building our home and it won’t be ready until July. We’d like to try to sell now and have a couple months rent back.

Our realtor has told us about 5-6 month rent backs. But this was last year and wasn’t sure if it was still a thing.

We’d probably be looking for a 2-3 month rent back.

What’s the general limit of rent backs and are buyers pretty amenable in this market?

Why would anyone who is trying to buy a house (presumably to live in) agree to let a stranger live in their house for 5-6 months? It's not like this is a great buyer's market -- this is the worst buyers' market in decades. So if you aren't going to actually provide housing to them, what's in it for them? If they waited to buy your house in 6 months, chances are the price will be much, much lower. Your agent is either delusional or purposefully misleading you to try and get you to sell at the peak so their commission will be higher. Your agent is probably hoping that once an offer is in hand, you'll agree to a shorter rent back. If that's not what you want then you need to wait to list it.

Selling a property means you are ready (or very close to ready) to vacate. Selling means transferring the right of possession (ie occupation) to another party. Do you want to do that? Then do that. If not, then you are not ready to sell. I get that you want to cash in before the market begins to unravel, but your choices are either sell now and move into a rental for 6 months, or sell later and risk missing out of the market peak. There is no third option of sell now but continue to live there for half a year at buyer's expense. That's obviously insane.

The reason that lenders don't allow this is because once the contract for sale is signed the buyer is responsible for any loss to the value of the house (it's called equitable conversion). So in a rent-back situation, the buyer is responsible for loss (ie damage) but not in control of how the house is cared for because the buyer isn't in possession. Most people underwriting or insuring the transaction are not willing to tolerate this situation for more than 60 days.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

I can live with that. Doesn't bother me at all.

Do you really think that people do, or should, care? Why? It's a business transaction. What you're basically saying is that sellers should knock ~$10k off the price. "Oh, you'll pay $980k? Well, let's make it $970k, so you'll like me.

Grow up.

How about instead of knocking 10k off the price, how about getting the hell out of the house after you make 1M selling it? You're not doing it to make the buyer like you (the buyer will never like you), you're doing it to not be a total bastard. And if you don't care about that, then may the same happen to you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are building our home and it won’t be ready until July. We’d like to try to sell now and have a couple months rent back.

Our realtor has told us about 5-6 month rent backs. But this was last year and wasn’t sure if it was still a thing.

We’d probably be looking for a 2-3 month rent back.

What’s the general limit of rent backs and are buyers pretty amenable in this market?

Why would anyone who is trying to buy a house (presumably to live in) agree to let a stranger live in their house for 5-6 months? It's not like this is a great buyer's market -- this is the worst buyers' market in decades. So if you aren't going to actually provide housing to them, what's in it for them? If they waited to buy your house in 6 months, chances are the price will be much, much lower. Your agent is either delusional or purposefully misleading you to try and get you to sell at the peak so their commission will be higher. Your agent is probably hoping that once an offer is in hand, you'll agree to a shorter rent back. If that's not what you want then you need to wait to list it.

Selling a property means you are ready (or very close to ready) to vacate. Selling means transferring the right of possession (ie occupation) to another party. Do you want to do that? Then do that. If not, then you are not ready to sell. I get that you want to cash in before the market begins to unravel, but your choices are either sell now and move into a rental for 6 months, or sell later and risk missing out of the market peak. There is no third option of sell now but continue to live there for half a year at buyer's expense. That's obviously insane.

The reason that lenders don't allow this is because once the contract for sale is signed the buyer is responsible for any loss to the value of the house (it's called equitable conversion). So in a rent-back situation, the buyer is responsible for loss (ie damage) but not in control of how the house is cared for because the buyer isn't in possession. Most people underwriting or insuring the transaction are not willing to tolerate this situation for more than 60 days.

^ this exactly. If you need 2+ months of rent back, then you are not ready to sell your house.

[Anonymous]

Very common. Last spring, we sold our house and rented back for free for 2 months. We also bought a house and the sellers’ rented back for 2 months for free.

[Anonymous]

It's not ideal but a rent back will be the easiest way for us to buy a house and have the movers do a house-to-house move without our furniture needing to go into long-term storage, which takes forever to get it back out again, and without us needing to find temporary housing that will take 2 big dogs and 3 kids. We're not asking for it for free and we're not asking for 6 months, but if we could use an extra 30-45 days and you're not planning on moving in until the summer anyway, what's the big deal if we cover your new mortgage for the first month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Free rent back is a disgusting power play by sellers taking advantage of desperate buyers. Not just a financial burden for buyers, but a huge inconvenience as they are trying to manage a move with their own families. Most sellers are making tons of money from their home sales nowadays, so they could pretty easily afford to pay rent, or find temporary quarters, but they've chosen to fleece buyers above their inflated list price. Sellers: Buyers will smile at you and say it's fine, and they'll offer free rent back in their contract, but never forget that the buyer knows you're fleecing them and thinks you're a total bastard for it.

I can live with that. Doesn't bother me at all.

Do you really think that people do, or should, care? Why? It's a business transaction. What you're basically saying is that sellers should knock ~$10k off the price. "Oh, you'll pay $980k? Well, let's make it $970k, so you'll like me.

Grow up.

How about instead of knocking 10k off the price, how about getting the hell out of the house after you make 1M selling it? You're not doing it to make the buyer like you (the buyer will never like you), you're doing it to not be a total bastard. And if you don't care about that, then may the same happen to you.

Or, how about I sell it to the person who is happy to provide a 2 month rentback, and you can look elsewhere?

The reality is, for many people in this market a rentback is just as important as waiving any of the contingencies. I'm not willing to pull my kids out of school to accommodate the buyer if I don't have to - and I don't have to. You may not like it, but my response is (i) tough), and (ii) you are free to not make an offer. We still have 9 others to choose from.

Seems like a strange hill to die on, though, as you are presumably looking to be in the house for a long time.

[Anonymous]

It seems like almost no one is selling right now without rent backs. We refused to offer it initially and lost a bid all things being equal because of it. So we wised up and stopped fighting on the rent back. The market stinks for buyers and it’s just the cost of doing business. I would never in my right mind consider more than 2 months though. You’d need to be paying cash and you also wont be able to get home insurance- it sounds like an absolute nightmare.