buyer protection seller lease
What’s Up With Free Seller Rent Backs in Sacramento Real Estate?
Given our strong seller’s market in Sacramento, many home buyers today are finding themselves closing escrow but not being able to move into their new homes due to the free seller rent backs. Part of the reason for the free seller rent backs is to induce the seller to accept an offer over another offer without the holdover possession. It’s also because many sellers are not moving up. At least not in my listing inventories.
Sellers are either a) a successor trustee or trustee of a trust; b) moving out of the area; c) selling an investment rental or d) buying a brand new home. They are not coming to me and asking to sell their home so they can buy a bigger, nicer home in a different neighborhood, which would be a normal Sacramento real estate market. But these are not normal times. We need to remind ourselves that much of what is happening today is NOT NORMAL. We can’t get complacent.
Ordinarily, buyers are sometimes a bit timid about offering free seller rent backs. This is a new concept to many home buyers. They don’t understand why they can’t collect rent from the seller, nor do many feel the full impacts of the craziness in limited inventory neighborhoods, but it is a fact of Sacramento real estate today. Sellers expect it and buyers will agree or the seller will sell to somebody else. It’s that simple.
To protect all of the parties, though, we do ask for signatures on a Seller in Possession addendum. This legal document was prepared by C.A.R. lawyers to protect all sides and state who is to continue paying for things such as utilities.
Three of my recent closings involve free seller rent backs. One was for 45 days. Another 3 weeks, and yet another a couple of weeks. In the last transaction, the seller was worried. Now I could understand a buyer’s reluctance, but a seller exhibiting hesitance was unusual. Why, I asked, would you fret over the free rent back when you’ve already closed escrow? Not to mention, you have your big ol’ pile of money, and you get to stay put until you’re ready to go. Doesn’t this exhibit peace of mind for you?
Because what if I broke something, the seller responded. Hmmm . . . you’ve lived in the property for 7 years, have you broken anything yet? No, but I might. OK, good point, let’s discuss.
But for everybody else, it’s a super great deal for sellers, even if buyers have to wait a little.