What is with rentbacks?

I have a transaction where the buyer and seller decided after the contract date to go into a rental arrangement. It is just more convenient for the seller to stay on for a few months than rush out to find another place. The buyer is an investor and does not have to rush to find a tenant. No other reason than that. So.... any further information on why I am seeing this on the rader. (I already understand the obvious, that it might be a ploy to keep the seller in their property and someday get it back - this situation is definately not the case.) Seller wanted to stay - buyer said sure. Rents will be a market rates.

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Permalink Reply by Bryant Tutas on August 23, 2009 at 1:21am
Cathy this could be opening up a can of worms. Depending on who the lender is the seller may have to sign a document stating they are not retaining possession of the property. To be on the safe side I would run it by the lender and see what they say. They take this stuff very serious,
Permalink Reply by Cathy McAlister on August 23, 2009 at 3:01am
Thanks Bryant.... I found it curious in light of the fact the lenders may be going into rentback agreements on their own.

Bryant Tutas said:
Cathy this could be opening up a can of worms. Depending on who the lender is the seller may have to sign a document stating they are not retaining possession of the property. To be on the safe side I would run it by the lender and see what they say. They take this stuff very serious,
Permalink Reply by Wendy Rulnick on August 23, 2009 at 4:35am
Cathy - I don't get involved in property management or rent-backs, early occupancy, etc. I just sell real estate. I have not seen that as a trend. Like Bryant said, it could be a "scheme". OR it could just be a temporary arrangement and you could take it at face value.
Permalink Reply by Mori Langshaw Sr on September 6, 2009 at 9:55am
And whats even worse is that you are in the middle of it. It is so easy to "sue" (make a claim against you) because you are "deemed" more knowledgeable (Im assuming you are a licensed agent in the state in question). I have seen agents lose their licenses because the seller sold their property "subject to" to an investor where the agent brought the investor. Monies were paid out at settlement (all legit) only to go bad after settlement and the agent was made part of the claim.

Wendy Rulnick said:
Cathy - I don't get involved in property management or rent-backs, early occupancy, etc. I just sell real estate. I have not seen that as a trend. Like Bryant said, it could be a "scheme". OR it could just be a temporary arrangement and you could take it at face value.

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