Very simple question, if you don't want to move for 4-5 years...why sell? Your proposal does not make a lot of sense to me.
The short answer to your question is Yes, you can make it part of the agreement to do a seller rent back for any length of time. Please let me know if I can be of further assistance.
Real Estate Broker/ RealtorÂ®
McAllister Homes Real Estate
Residential Sales & Property Management
You are fearful that your home will decline in value in 4-5 years so you want to sell sooner and pay rent to the new owner. You think the decline will take place because of â€¦ ???
Do you think that renting your house from the new owner will cost you more or less on a cash flow basis? If I was the buyer of your house with an agreement to keep you on as a tenant, what would I get in exchange? If I could get higher rent by renting to someone else why would I agree to keep you as a tenant? I would expect a rental premium from your or a discount in the sale price of offset a concession in rent to you.
Also, think about the rent that you would be paying in cash to cover the new ownerâ€™s cost of ownership including his PITI, HOA, upkeep and ROI and weigh that against the after tax cost of your ownership now given that much of your monthly mortgage payment is tax-deductible interest.
I respect the fact that you are trying to construct a long-term plan. I think you need to sit down with some professional that your respect â€“ local Realtor, local banker, and investment professional â€“ and bounce your ideas off them.
I agree with Cindy in that your pool of buyers might be very limited were you to ask for a 4-5 year lease.
Who know's...things are so hot right now you might get lucky and find a buyer who wants to move to our area in 4-5 years and wants to secure a property now before things get out of hand price-wise.
As your hearing, it's all about negotiating the sale, but I agree with Ron Thomas below. I'm not a tax accountant and I'm not giving you Tax advice, but you need to speak with a Tax Professional before you make this decision. Think about all the possible scenarios. Loosing your MID and possibly incurring a higher than your current mortgage rent payment, might not be a good financial business decision. And since your home is the largest investment you have, don't make a decision without that consultation first.
Thank You for using Trulia.
But if you love the home, and you want to stay in the home, why do you want to trade your mortage for a rent payment?
You will lose the tax deduction, and if you are actually making money, that too will be taxable if you don't buy another home, (see your tax advisor!)
In California, I utilize the CAR form LSA , Lease After Sale Agreement.
When properly executed, it creates a legally binding agreement for the proposed buyer to accept a specific amount from the seller to allow time in the property after the sale is recorded as well as who pays for other items such as taxes,maintenance , utilities,etc.
I have had much success and zero failure assisting sellers accomplish this. I would advise you to seek a listing agent who is skilled and proven in this area. If not done properly , there can be a lot of confusion and disarray.
I'd love to provide you a quote and more details!