For homeowners who have found themselves in a financial bind, it can be advantageous to work with a company or private individual that offers sell-and-rent-back agreements. Choosing this option has several benefits that may outweigh the risks. Continue reading to learn more about sell-and-rent-back agreements and how such agreements may help you get back onto your feet without having to leave the comforts of your home.
What Is a Sell-and-Rent-Back Agreement?
A sell-and-rent-back agreement (otherwise known as a rent-back agreement, for short) is a property transaction that allows a homeowner to sell his or her property and then continue living in it. In order to continue living in the home, the seller agrees to pay rent, just like a regular tenant would. Furthermore, the firm or individual providing the rent-back agreement usually purchases the home for cash at a discount.
What Are the Benefits of a Rent-Back Agreement?
Choosing to sell and then rent back the property from a buyer isn’t for everyone. Nevertheless, it can be a worthwhile option for those going through major financial trouble and who are behind on their mortgage payments. Furthermore, some homeowners choose this route rather than selling their home on the open market or to a cash buyer so that they can either have more time to translocate, stay in their home without having to move or sell, or solve their time-sensitive crisis.
How Do You Get a Rent-Back Agreement?
Since there are various types of sale-and-rent-back firms, it will be important that you choose who you work with wisely. Companies and individuals who provide these types of agreements are regulated by the FCA, but they can still be risky for sellers—especially if the firm isn’t very reputable or lacks industry experience. So, to lower your chances of getting evicted or running into different financial trouble, make sure that you get expert financial and real estate advice from a professional, and that you only work with reputable businesses.
If you are still considering a rent-back agreement, you should first try contacting your local home buying company. While not all home buying companies offer this option, some do. Agreeing to a rent-back scheme with a home buying company is usually a much more trustworthy option, and they can help you consider other solutions as well—like selling for cash on your own timeline.
Having trouble making those mortgage payments? Click here to learn how The Easy Home Buyer can help you out of your financial crisis!