Leaseback Agreements Are More Popular Than Ever by Greg McKinney Mineola Texas


With the vast majority of homes across the United States going under contract within the first month it’s creating another new problem we haven’t seen before in this red hot real estate market. With very few homes available to purchase sellers are having difficulty finding another home to purchase after the home they are selling goes under contract. Many are not accepting offers on their homes until they find another home to purchase. Some are writing up the contracts to allow the sellers to lease the homes for several months after the sell to give them time to find a new home. In some cases these sellers are paying extremely high monthly rent just to stay in the home they just sold.

Scheduling the purchase of your new home with the same time you sell your old home has become almost impossible. We are even see the sellers lease the home they just sold for as long as 6 month to give themselves as much time as possible to find a new home. Many sellers are refusing to accept contingency contracts which make it even more difficult for the person selling their home to purchase a new home.

These temporary rental agreements are mainly structured with a daily rate. With the market being so competitive right now the sellers are negotiating very high daily rent costs to convince the new homeowners to allow them to stay in the home for a few months. It’s becoming one more thing real estate agents are having to negotiate during the process. Approximately ¼ of all homes sold across are sold with these leaseback options.

I’m Greg McKinney from Mineola TX and this is something we recently discussed with the buyer of one of our homes. They had been leasing back the home they had sold a few months ago. One thing they mentioned was the buyers of their old home had to obtain a homeowners insurance policy for rental property while the they were living in their old home. These type of leaseback agreements can create problems for both the buyer and the seller need to be aware of. The insurance company needs to be aware the home is being used as a rental. The insurance agent will need to issue a specific type of policy for a rental property and then change that policy once the buyers have actually moved into the home. This could be a very costly mistake if something happens to the home before the new owners move in. Insurance companies are always looking for an excuse not to pay so make sure you have the correct insurance coverage in place prior to signing a leaseback agreement.

Many sellers are opting just to move out and find a home to rent for 6 months to give them time to find a new home. This can be extremely stressful especially if you have a large family with a large amount of items to move. One option is to move the majority of your items into storage and just take what you really need to your new rental. I know one family who did this and discovered after a few months of having a large portion of their items in storage that they really could live without most of those items. So as a result they began looking for smaller homes which in turn will ending up saving them thousands of dollars for years to come. They never intended to become minimalist but this current real estate market has pushed them to rethink the way they actually live. In the long run this turn out to be a positive for this particular family.

Greg McKinney Mineola Texas TX

related articles

Stranded Sellers

Buying a house

Options for sellers

Homeless sellers

Real Estate Madness

Comments

Post a Comment

Popular posts from this blog

Which Home Improvements Add The Most Value To Your Home by Greg McKinney Mineola Texas

Image
Hello,  I’m Greg McKinney from Mineola TX and we have remodeled dozens of homes here in East Texas over the past 30 years. Whether you are working on your personal home or investment property, one thing I have learned over the years is to always spend your money where you will receive the highest return on your investment. Think through each project you are doing thoroughly. If you’re thinking about updating or remodeling your home it’s a good idea to invest your money in the areas of your home where you will get the best return for your money. You want to add as much value to your home as possible while spending the least amount possible. Here is a list of the main projects I would recommend. We will dive deeper into each in this article. Paint Adding Faux Stone Updating the Kitchen New Siding The top thing you can do to update your home is a fresh coat of paint inside and out. It is amazing how drastic paint can change the appearance of a home. It can get costly to hire this done...
Read more

Hidden Remodeling Cost

Image
By: Greg McKinney Mineola TX When I first started investing in real estate almost 30 years ago, I was shocked at all of the costs that were associated with purchasing and selling real estate. If you are just getting started investing in real estate and you intend to purchase your first investment property for a rental or to flip, there are many costs people tend to forget when starting a home remodeling project. I'm Greg McKinney from Mineola TX and I have been remodeling houses in East Texas for almost 30 years and one of the big costs people tend to overlook are  closing costs . I'm not referring to just closing costs when you purchase a piece of property but also closing costs when you sell the property. Depending on the purchase price and resale price of the home can add up to thousands of dollars. If you use a realtor to resell the property for you the cost can go up significantly. Before purchasing a piece of property, investors should do their due diligence and speak wit...
Read more

Mistakes First Time Home Flippers Make

Image
The shows on TV make it look so easy. Find a cheap house, make a few cosmetic repairs and sell it for a huge profit. They make it look like so much fun that everyone is doing it. Homes are being flipped all over the country but as many first-time flippers are learning it isn’t as easy as it seems. Many miss basic things and either lose money or make very little. Here are a few mistakes new flippers make and how you can avoid them. Flipping houses is a serious business and it requires a large amount of research before jumping in. Most new investors do not realize the time and money it will take to do a project. Most investors believe they can physically have the skills and knowledge to do the work themselves, but they quickly find out that is not the case. Having good judgment and making good decisions is extremely important when investing in real estate. A very simplified explanation of house flipping is you simply want to buy the house as low as you can and sell it for as much as ...
Read more