Rent Back

Renting back the property that was just sold is a popular solution for sellers who need to find a replacement home but do not want to move twice nor spend money on temporary housing. Let’s do a deep dive to uncover how this works.


The seller and buyer of the subject property will agree on rent amount and terms to allow the person who just sold the ability to remain in the property until they secure their next home. The terms that will be worked out in this scenario are the same as with any rental agreement:

  • What will the rent amount be
  • Term, or length of stay
  • Who will pay for utilities
  • Who will pay for maintenance
  • What will the deposit be
  • What condition must the home be in when vacated
  • What are the rights of access to legal owner

The Realtors involved in the transaction will have access to agreements that cover these items and more. Deposits and rents are often prorated, credited, and adjusted directly through the escrow account meaning the buyer will receive deposit and rents upfront eliminating any concern for non payment of rents or having to collect monthly rents.


The term of the rent back is completely negotiable between buyer and seller. 30 – 60 days is very common. Six months is not unheard of. I’ve arranged these agreements. Anything longer might be difficult for the new buyer who is often anxious to move into their new home. It is not impossible. But, a long term rent back is more likely to work if the buyer is an investor and not an owner-occupant.


Typically, the buyer will ask that the rent covers the cost of their new mortgage. But, I am writing this blog in Spring of 2021, the most competitive market on record according to the California Association of Realtors. Due to the level of competition, many buyers are looking for anything that will give them a competitive edge during bidding wars. That often means offering a seller who needs to rent back the opportunity to remain in the property rent free for the first 30 days.


Offering a seller who is anxious about having to move twice in order to find a replacement home the opportunity to remain in their property while they shop gives a buyer an advantage when bidding on a home.

The biggest drawback for the buyer is that they will not be able to move into their home right away. Let’s review a few commonly asked questions from buyers on this topic:

Q: What happens if the house is damaged during the rental period?

A: Damages will be covered through the security deposit. You can also ask the seller to purchase renter’s insurance during their stay.

Q: What happens if the seller will remain past agreed upon time?

A: If the seller took on a sale and paid all the cost and stress associated with it, they are pretty serious about moving elsewhere. Often a portion of the seller’s proceeds will be held in escrow and will only be returned to them after they move. This further ensures they will move.

Q: How do I know the seller will pay the rent?

A: Often, rents are prorated and paid ahead of time through escrow. This means that at the time of close, the buyer will be paid or be credited, in a lump sum, the total rents owed.


A rent back is almost all pros and no cons for the seller. The ability to remain in the current residence without the inconvenience of moving twice is unparalleled convenience. The two major drawbacks are having a deadline to move, and possibly paying more for rent than the seller was paying for their own mortgage.

Renting back is just one of several solutions available to sellers who are looking to sell their current home in order to upgrade to their dream home. In subsequent blogs I’ll cover the option of making the sale contingent on finding a replacement home, using trade in programs, selling i-buyers or cash buyers.

Would you like to discuss how this might work for your unique situation? Let’s chat! Click on link below to schedule a 15 minute phone consultation to start.

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