If you’ve sold a home before, you may have experienced the stress of packing and moving out before closing and hoping that there are no last-minute issues that cause the deal to fall through. This fear may even cause you to delay putting your home on the market. However, there are times it may be helpful to sell your home before you really want to move. This often happens when you are having a new home built, but aren’t sure of the completion date. Or you may want to take your time packing and moving after closing to avoid the rush and paranoia.
There is a way you can sell your home so you’re sure the funds are available for the new purchase, and continue to live in your old home until construction of the new one is complete, or the closing has happened.
In Texas, we call this a Seller’s Temporary Residential Lease, which can be established using the Texas Association of Realtors (TAR) form 1910 or Texas Real Estate Commission (TREC) form 16-5.
These forms are designed for transactions when the seller will temporarily occupy the property after closing for less than 90 days. The particulars of the agreement may vary, but in a strong seller’s market, buyers will often agree to let the seller stay in the home for a short period (and potentially for little to no charge of rent). In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high.
Once the contract is executed, the seller will essentially become a tenant after closing, and the buyer will become the landlord. The lease states the length of time the seller will remain on the property, and the amount of rent paid, if any, can be a fixed figure paid out of the proceeds at settlement, or a monthly or daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer’s new loan. Sometimes there is a deposit against damage, sometimes not. There is usually a clause stating that the seller will hold the buyer harmless for any damage to himself or his property that occurs after closing and before the seller moves. As a tenant, the seller may want to talk to their insurance provider about a short-term renters policy.
As with any property transaction, everything is negotiable. Adding a lease-back agreement to your negotiations may save you a few headaches, and possibly some money.
If you’re looking to sell your home, having a REALTOR on your side who is experienced in contract negotiation and can identify potential opportunities and pitfalls will help reduce the stress and anxiety that can occur during the sale of a home. More information for sellers is available at KendallBexarHomes.com.