Here are the details of negotiations when rent-back is a factor.
Today’s question comes from the selling side: “Can we get a rent-back after the close of escrow?” The answer to that question is yes, you can always ask for a rent-back. First, let’s discuss what a rent-back is. Once the closing is completed, you can ask for the change of possession to be three days later, 15 days later, three months later, etc.
What’s nice about that for sellers is, first of all, it’s easier in this market because demand is high and supply is low. Sellers have a lot more control over what they can negotiate and picking the best buyers. If you have two identical buyers, and one is willing to give you a free rent-back for a month, that can be nice; once you close escrow, the deal’s done, the stress of it is over, and you can start to focus on boxing up all your stuff and moving out within that month. Then the money gets wired to your account. It really helps solidify the closing and then you can begin the process of moving.
We’re often asked whether we can guarantee a rent-back for our clients. It always comes back to what you want. For example, let’s say that there are ten offers on a place, the highest offer is $50,000 more than the next best offer, and the lower offer is willing to give a three-month rent-back. The highest offer says they want you out at the close of escrow. That’s where you have to decide if fifty thousand dollars less is worth the buyer giving you a rent-back. You could also talk to that second buyer and offer to come up in price and we’ll work with you. It really is all about negotiation.
When you work with us, we’ll lay out the different options and present them to you. As a seller, you have the final say. Do you have that rent-back, and do the numbers make sense? A lot of times sellers will say that it’s not worth it since they can be out quickly and want to see if they can get half the amount. It always depends on what the buyers are willing to do in this market.
Hopefully, this helps answer your question about rent-backs. Feel free to contact us if you have any additional questions. We are never too busy to help you.