Market Wise Q&A: Should We Sign a Rent-Back Agreement?
Pat Kapowich for the San Jose Mercury News Q: We sold our home with the stipulation that we could Rent-Back the house for up to six weeks. The Buyer’s agent is now asking us to sign a Rental Agreement and put up a deposit. We feel this is a little silly based on the circumstances. Our friends just rented back their home for two months without any rental form. My husband does not want to sign, which is causing a flurry of e-mails. How common are these Rent-Back agreements anyway?
A: Not common enough! Savvy agents will reference a Rent-Back agreement in the blank part of the purchase contract under “additional terms or conditions.” Other agents will simply write something about a rent-back period and rate, but not stipulate that a written rent-back form will be executed. Regardless, many Sellers feel it is a personal affront to even suggest a rental deposit is required. It is important to note: Sellers seldom damage the home, the movers often damage the property ~ for example, marked-up vinyl or hardwood, doors and door jams. It’s equally important to remember that rent-back agreements protect everyone’s interest. So much so that those agents should incorporate a Rent-Back form with the original purchase offer or counter-offer.
Now is certainly not the time for a cumbersome three-page residential lease agreement. Instead, make sure the agents involved use a preprinted one- or two-page rent-back form. It includes terms such as “seller in possession after close of escrow” or “seller occupancy after sale.” The rent-back forms should not make your husband uneasy. In fact, its purpose is to make him feel at ease about his brief tenancy.
Send questions for the Market Wise column in the San Jose Mercury News to Pat@SiliconValleyBroker.com