6-8 months could possibly exceed the time their lender might approve a rent back, exceed the time allowed for the property to become 'owner occupied' and not considered an 'investment property'. Your potential buyers will need to look into their financing, see if what you are proposing is possible at the rates they want to lock down.

We did that for three months. Though we had a lease we didn't actually pay any rent. We sold our house without a realtor and told buyer we wouldn't move until June. They wanted to close in March for interest rate purposes so we said okay but we're not moving until June and we're not paying rent.

One thing I was concerned about was making it clear who was responsible for repair/replacement of things that broke down. We settled on buyer for anything over $500.

You do need a written lease to protect both parties. We had ours prepared by our real estate attorney.

I sold my house last year as I had to relocate to a new city and had not found a new home. The contract had me renting back from my buyer for six weeks with an option to rent for two more months. I paid for the six weeks rent and the security deposit at the closing.

The rent was market rent but I didn't have to pay the taxes of course, HOA or homeowners insurance (just renters insurance), so my monthly output was about the same as when I owned the house. I ended up extending it about three weeks past the original contract date, paying a per diem. The buyers only required a three day notice that I was moving but I gave them two weeks.

They buyers were eager to close on the house for financial reasons but they planned to rent it for a year or so before they moved back to the area. So they were happy to have a tenant in place for a few months.

The buyers had a home warranty for the major systems and appliances but I would have been responsible for the deductible; I had a pretty big security deposit ($3K); other than that I was responsible for leaving it in the same condition as at the walkthrough before closing. I kept the same professional landscapers taking care of the lawn and I had the house professionally cleaned after I moved out and they gave me my full security deposit back. I didn't have any major issues but my listing agent took care of all the details as far as communicating with the buyers' agent since it was all part of the sales contract.

Financially it worked out really well as I didn't have to move twice or put my stuff in storage. When I was ready to buy my current home I didn't have any issues with financing or home sale contingency, so I was able to win out over other buyers in the hot seller's market I was buying in. The biggest downside was that I really loved that house and living in it as a tenant was very depressing.

...that will be finished in 6-8 months.

It seems like a lot of builds take longer than what is initially projected. Are you prepared to move somewhere temporarily at the end of your rent-back situation until your new house is actually done?

Personally, I think you should pass on this sale of your current house. 6-8 months is a long time. Just wait until the time gets closer and an actual finish date is more likely and then sell your house.

We live in a small town where "good" houses are purchased fast and furiously. We have not even listed it with but yet we have had several people call us and ask about our house. The rumor mill runs our town! So now we are stuck. We really don't want to move early due to jobs and expenses of renting in a larger town. We could but with two dogs and a short term lease might drive the price up. That being said the buyers are young and dont want to miss out and are more than willing to wait when we told them about our build. They have been waiting for 3 years to find a ranch styled home in our area. They offered us full price and okayed the rent back until our home is finished. They already own a smaller home in our town but do not need the proceeds to finance the purchase. Now its what to do?

We're getting ready to list our house to move out of state but can't leave until at least the end of this summer and are hoping we don't have to move twice. If we do sell earlier than we're ready to leave, we're hoping our buyer will be open to renting back to us for a short time until we can move.

If it all works out, I would take advantage of the option of selling now but staying as a renter and moving when your house is ready. The market is strong now and you have a willing buyer - I wouldn't want to take the chance that those 2 things might change 6-8 months in the future, especially if it means you'll have 2 mortgages. We're maintaining 2 houses now and costs add up each month.

Edited to add - if you do sell and rent back, be sure you have a lease that allows you to stay until your house is ready.

If you are in that much of a sellers market, why not just live there and put the home on the market when you have a for sure move in date for the new home?

We would but we fear that the amount of homes being sold at an alarming rate and the fact that the amount of buyers might be limited in 6 months. Our small town has a pop of 1300. We had planned on listing with a realtor in June. Unfortunately our town found out about our plans.

The rumor mill runs our town! So now we are stuck.

...

Unfortunately our town found out about our plans.

Huh? It sounds like you feel pressured to sell now because everyone 'found out' you're moving soon?!? Who cares if people are clamoring all over trying to buy your house? It's your house and your life. Sell whenever you want to.

If it's a seller's market now, I'd sell now. Who knows what the market will be like in 6-8 months. It's why we put our house on the market now even though we haven't even started our build.

greg you must not live in a small town. If you did you would get it. You are right our life our home thats why I have asked the question about rent backs and any issues people have had.

A big thanks to those who have given advice to renting back and staying in our house until we are ready. From what I've been able to find out its doable as long as the rent back is within a short 60-90 days so it doesnt complicate things for the buyer.

So if you sell now with a longer escrow period and then have a 60-90 day rent back perhaps would this put you closer to your estimated move in date?

I understand your hesitation - for many reasons we would rather sell our house and move next year instead of this summer, and we still might do that, but we've already bought our out-of-state home. I just don't feel very comfortable waiting a year to sell our home here and risk missing out on the current real estate market. We bought our fixer upper second home in a strong seller's market (and for more money than we planned on spending) so we'll need every bit of equity we can get to put into that home and make it as nice as the one we have now.

I would TOTALLY SELL and rent back. DO IT NOW. Your stress level will increase as you go through your build, budget overruns, issues, unforeseen things, and not having to worry about cleaning, marketing, showing and selling your house will give you a huge piece of mind, eliminate any surprises, allow you to live on as "normal", and have access to that liquidity SHOULD you need it.

I am not even sure why this is a question - this is PERFECT.

How coincidental that the famous (or infamous) Lord Black has just sold and leasebacked his estate in Toronto--a leaseback that included a buyback clause should he change his mind.

In your case, go for it as long as you have a written lease, as others have suggested. I've been on the other side once. Bought my first house and after the Purchase and Sale Agreement had already been signed, the Purchasers asked if they could stay on for a couple of months till their new place was ready. So I rented them the first floor and basement while I lived on the second floor, which included a secondary kitchen. They were excellent tenants!

I did this decades ago when I lost the place that I was planning to move to (rent) due to delays in closing (because of issues with their finances I later learned). The buyers agreed to allow me to rent for 2 months while I found another place. The only problem was, it turned out that they had intended all along to just flip the house (this was in 1989, very overheated housing market in SoCal (which is why I needed the time to find another rental) and they put the house up for sale without warning me -- had buyers coming on the property to look while I was at work without me knowing.

How coincidental that the famous (or infamous) Lord Black has just sold and leasebacked his estate in Toronto--a leaseback that included a buyback clause should he change his mind.

Unless I am completely misunderstanding the OP they are not talking about a sale and leaseback. They are talking about a post closing occupancy agreement. While these things may sound similar, they really are not. A sale and leaseback has more in common with a home equity loan or reverse mortgage than it does with a post closing occupancy agreement.

Just checking back in .. We have successfully closed on our property and will begin renting our home until our new build is completed. The buyer gave us full asking price with the option to stay on until December. We sold this fsbo with no troubles. PTL!

Congratulations on selling your home and leasing it back from the new owners.

Lately, my agent friends have mentioned a few more of these as homeowners sell to investors/homebuilders who want to buy now and build later.