A rent back situation is when a seller of a home will “rent back” the home after settlement from the buyers, or at that point, the new homeowners.
An example would be:
Seller has house on market.
Buyer brings offer to seller.
Buyer and Seller agree to contract terms.
The house settles/closes and the buyer now owns the property, but the seller is going to remain in the house for seven days after closing, before they can move into their next house. The seller, since the house is already closed, will now be renting the property from the buyer, who now owns the house.
Why would this happen? The seller may be buying another property, and that property may not be able to close until after this one does. That is a situation that has happened a number of times. Be aware, though, that many loans have a time limit where the buyer must move into the house, in order for their loan to be valid. Sometimes that is two weeks, sometimes a month. Check with your loan officer to make sure you are compliant with your loan terms!
If you’d like more information about a Baltimore rent back, and are not under contract with another agent, I’d be happy to discuss more with you!
The contract on our home just fell through, however – the buyers were from Chevy Chase, Md. and their house closes on Sept. 7, 2012. We were told they are renting back from Sept. 7 – 14, 2012 – we were also told this is illegal in the state of Maryland. Is that true?
I’m sorry to hear that your contract just fell through. I have not heard that a seller renting back a house from a buyer for a short time is not allowable, though I do know that for many banks, the buyer must occupy the house within a certain amount of time.