Sell and Stay: The Ultimate Guide to Residential Leasebacks
This article is a complete Residential Leaseback guide for beginners.
This new guide will cover all the Residential Leaseback basics you need.
(Along with information on how to qualify, where to start, and how you can get a head-start.)
So if you are looking for alternative ways to sell your house, this Leaseback beginners guide is for you.
What is a Residential Leaseback?
In short, an innovative new way to sell your home and stay as a renter. A tool for cashing out your equity without sacrificing your lifestyle or the place you live in. Some customers have referred to leasebacks as a reset button and a way to pay off their debts without leaving the comfort of their homes. In this guide, we will cover everything you need to know about this family-friendly alternative to home-selling.
Over the past couple of years, digital companies have begun joining the residential leaseback movement. Pioneers like Sell2Rent have been hard at work creating a user centric platform that makes leasebacks easy for homeowners. To keep the process transparent and ensure homeowners get a deal near market price, they connect homeowners with investors around the country.
It is important to note that companies like Sell2Rent do not purchase homes. Instead, they find investors willing to buy the house as a rental property and act as the middleman throughout the sale process.
What makes Residential Leasebacks Special?
- Financial Flexibility: Homeowners cash out their home’s equity and stay as renters. Selling allows them to pay off debts, cover their children’s tuition, or buy a new house.
- Privacy: Leasebacks are a way to sell your home privately. By selling directly to a qualified investor, there is no need for marketing, open houses, or “for sale” signs on your lawn. Your neighbors won’t even notice you have sold your property!
- Less Tasks: The owner is now in charge of all the responsibilities that come with home ownership. Say goodbye to repair costs!
Selling your home online and directly to an investor has multiple benefits. Apart from the three listed above, it can help you get some weight off your back while you deal with financial troubles or personal issues.
Homeowners going through divorce or medical procedures do not have the time to market their homes for sale. This hecticness usually leads to them accepting the first offer instead of the best one possible. After selling, they have to navigate through moving expenses, finding a new property, and sometimes, enrolling their kids in a new school.
Are Residential Leasebacks Right for You?
Now, let’s explore if residential leasebacks are the right move for you.
According to Alex Arguelles, Co-Founder of Sell2Rent, “Today, most home owners that come to us with wishes of selling their homes are going through some sort of tough financial or personal situation. At a smaller scale we also see a fair number of opportunistic sellers looking to cash out their home equity that has appreciated over the last number of years”.
Leasebacks don’t discriminate, but some homeowners could use one more than others. For example, if a homeowner has credit card debt but has a respectable amount of money invested in their house, it would be intelligent to cash out and use that equity to get things right.
Another common scenario consists of couples going through a divorce. Spouses are actively searching for the best way to split their assets and move on with their lives. However, some wish they could stay in the place they love. Through a leaseback, exes can divide the home’s equity evenly while one stays home as a renter. This flexibility is especially beneficial when kids are involved.
Americans who have been rejected from a reverse mortgage due to poor credit scores can find a good neighbor in leasebacks. Since this home-selling process does not create any debt, a low credit score will not stop homeowners from qualifying. Meanwhile, alternatives like reverse mortgages commonly reject homeowners for having bad credit.
Do You Qualify?
Pressing the leaseback “financial reset button” has many advantages. But to do so, you must meet some requirements.
- Homeowners must own a substantial share of the house they are living in. A sale-leaseback agreement won’t be financially viable without enough equity to cash out.
- The property must be a single-family home or a townhouse. Platforms like Sell2Rent don’t operate with highrise apartments or other building structures. If your house looks like the ones below it’s good to go!
- If you are a real estate agent, you can also qualify to upload listings. However, you must be the sole representative of the listed property. This means that the property cannot be listed in the MLS.
Sell2Rent has a free and easy form to begin your listing process. You can start by clicking here.
How to Get a Head-Start:
If you are considering a residential leaseback, here is some information that most registration forms will ask for:
- The total mortgage balance of your property
- Your total household income
- Credit score range
- An estimated evaluation of your home
- The price you are willing to pay as monthly rent
So when you’re ready to begin your journey, just be sure to have all of these in hand!
What does the Timetable Look Like:
As of today, there are a couple of legitimate digital platforms that offer leasebacks. For the sake of uniformity, we will trace the steps Sell2Rent follows.
- When you hop on the site, a request offers button will greet you. Click on that, and a form will appear. Filling out this form can take from three to ten minutes, depending on how much information you have on hand.
- After filling out the form, the site will prompt you to schedule a meeting with one of their professionals. During this meeting, an expert will interview you for details about yourself and your property.
- During the process, they will request that you submit images and a quick video tour of your property. This is to show investors what the property they are investing in looks like.
- After you submit the necessary documents, Sell2Rent will find the perfect buyer for your property. When Sell2Rent finds a buyer, you will receive a cash offer and a rent price.
That’s about it. Everything after that depends on whether you wish to accept the offer or renegotiate it.
So there you have it. A beginners guide to residential leasebacks.