Homeownership Terms to Know: Rent-Back Agreement, Joint Tenancy & More

From the outside, buying a home may seem like a zero-sum game: the seller relinquishes ownership of a property to the buyer in exchange for money and the buyer becomes the property’s new outright owner. However, there’s more nuance to homeownership than meets the eye. The following homeownership agreements provide alternatives to a traditional home purchase. These options may be right for you when searching for your next home.

Homeownership Terms to Know

Rent-Back Agreement

A rent-back agreement (also known as a sale lease-back) is tailor-made for homeowners who are buying a home while selling their current one. Buying a home and selling a home are both significant undertakings in their own right, but when combined, everything is heightened. For all your planning, successfully executing both transactions is predicated on a variety of factors, including the local market conditions in both places.

A rent-back agreement is a clause in the sales contract that allows the seller to rent their old home from the buyer for an agreed-upon period of time before the buyer moves in. The agreement will include the length of the rental period and the seller’s rental costs, while spelling out the responsibilities of each party during the transition.

These agreements are mutually beneficial to buyers and sellers. Not only do sellers buy themselves time to find their new home, they collect proceeds from the sale of their current one, which can be used to help fund their new home purchase when the time comes. The money collected from sellers’ rent payments is an obvious bonus for buyers. And in a competitive market, making an offer that gives the seller flexibility in their moving timeline may help it stand out amongst the competition.

 

Image Source: Getty Images – Image Credit: FG Trade

 

Joint Tenancy

When two or more people purchase a property together, Joint Tenancy with Right of Survivorship (JTWROS) requires that all co-buyers hold an equal interest in the property and that they all come into ownership through the same title at the same time. If one co-owner dies, ownership passes to the other co-owner—this is known as Right of Survivorship.

This form of co-buying a home presents an opportunity to prospective home buyers who may not yet have the means to purchase a home on their own by combining their buying power with that of their co-buyer. However, entering a real estate transaction with a co-buyer means that you’re financially tied together, which opens the door for added risk.

Tenancy In Common

When co-buyers hold a title as tenants in common, shares of the property can be divided equally or unequally. But even with a disparity in ownership percentage, no one owner may claim sole ownership of the property. When a tenant in common passes away, their ownership is bequeathed to their designated heir.

Tenancy In Severalty

Unlike Joint Tenancy and Tenancy in Common, Tenancy in Severalty represents an agreement in which one individual, corporation, or entity owns the property and does not share ownership with anyone. 

To learn more about the homeownership options available to you, and for help searching for your next home, connect with a local, experienced Windermere agent:

 

 


­­­­­­Featured Image Source: Getty Images – Image Credit: ArLawKa AungTun

The post Homeownership Terms to Know: Rent-Back Agreement, Joint Tenancy & More appeared first on Windermere Real Estate.

Where to Stay While You Sell Your Home

The time between selling a home and moving into a new one can be a challenging period for homeowners that leaves them with a basic question: Where should I live? In the interim, there are various housing options to choose from but picking the right one depends on your personal situation and the amount of time it will take until you move into your new home.

Once you know it’s time to sell your home, there are various factors that will have an influence on what housing is available to you. Your budget will help determine your options. For example, if you are already in contract with your new home, you might be looking to save some money in preparation for move-in costs. Seasonality plays a role as well. Talk to your agent about real estate trends in your local market to understand which housing options tend to be available at certain times of year.

 

Image Source: Getty Images

 

Where to Stay While You Sell Your Home

 

In Your Home

There is the option to stay in your home while you sell it. If your home is still on the market, understand that a fully staged home will be fundamentally different from the one you’re used to. Once you’ve sold your home, there are additional options for staying as well. By working closely with your agent, you can negotiate a longer closing period or a rent-back agreement with the new owners. A rent-back agreement is an agreement between the two parties in which the seller rents their old home from the buyer for an agreed-upon period of time before the new buyers move in, allowing for a smooth transition to take place. Depending on the buyer’s urgency to move in and the competitiveness of the market, a rent-back agreement may not be feasible, but in the right situation it presents a mutually beneficial solution.

 

Apartment or Condo

Renting an apartment or condo while you wait to get into your new home can help make the transition easier. To avoid unpacking all your belongings only to have to pack them back up when it’s time to move again, try to find furnished listings in your area, or search for units that offer furnishing at an added cost. Although paying rent is an added expense, this set-up can help you stay organized throughout the moving process.

 

Friends & Family

If you have friends or family nearby that have space to accommodate you, they may be open to the idea of taking you in until you’re able to move into your new home. In this scenario, you’ll likely need to store your household items elsewhere, which will come with an added cost. Of all the options, this is typically the least expensive.

 

Short-Term Rentals

The short-term rental market offers a flexible approach to finding somewhere to stay. Filtering your results by location will allow you to select a place that won’t disrupt your daily routine. If you won’t be moving into your new home for an extended period of time, you can choose a rental with amenities accommodate your longer-term needs. Keep in mind, the cost of short-term rentals can easily add up, and in some cases may be more expensive than renting an apartment or condo.

 

Hotel

Another popular option for riding out the interim period between houses is staying at an extended-stay hotel. These hotels usually offer amenities that accommodate long-term living like a kitchen, living space, laundry services, a refrigerator, internet, and more.

For more information on selling your home, visit the Selling Page on our blog. To get an idea of what your home is worth, try our free home value calculator at the link below:

 

What’s my home worth?

The post Where to Stay While You Sell Your Home appeared first on Windermere Real Estate.