If your seller needs to lease back the property after closing, please keep this in mind as it pertains to most situations. If you'd prefer to read about how a lease back works, you'll find the information in text format below the video.
Greetings. In this competitive market, many buyers have been willing to let the seller lease back the house after closing – but in many cases, there’s a 59-day limit for how long that lease can last. Why? Because in order to get a standard home loan for an owner-occupant, the buyer must take possession of the house within 60 days. If not, they’re considered an investor which means a higher interest rate and usually a higher down payment. It became apparent over the past 18 months that many agents didn’t understand this. Lenders I work with shared stories of loans being turned down because they were written with leasebacks longer than 60 days. I saw sellers asking for 3 to 6 months of a leaseback which meant they shrunk their pool of buyers to only investors and cash buyers – now that may have been just fine given the seller’s situation, but I’m guessing most were simply because sellers and their agents were clueless.