Have you thought about rent-back agreements during bidding wars? It’s something to reconsider. Rent-backs might not be advantageous for buyers, and here’s why:
Once you become the owner, any rent-back arrangement means you become both homeowner and landlord. This brings in tenancy laws and regulations, even though you haven’t lived there yourself. The previous owner, now your tenant, could decide not to vacate the property as agreed.
In such a scenario, you’re left with mortgage payments to make, potentially during a competitive bidding situation where every cost matters. Without a firm rent-back agreement, the previous owner-turned-tenant could be enjoying rent-free living in your property, leaving you responsible for everything.
Even if they do vacate, there’s the risk of property damage or other issues to address. It’s crucial to carefully weigh these factors before proceeding with a home purchase where a rent-back is being considered.
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