Renting Back in Santa Barbara market- with our pets and long hours, we would like to sell our current home

Asked by Triplea, Santa Barbara, CA Sat Sep 13, 2008

(3/2 SFR) but rent back while we look for a replacement. What are the realities of a sell-rent back situation? Our neighborhood seems to have a nice mix of owner occupied as well as single family rentals with roomy lots but not a magnet elem. school system. Any success stories in this market? Tips/ideas on this appreciated.

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John Walin, Agent, Libertyville, IL
Fri Mar 4, 2011
Wow,
This goes way back! Hope everything worked out great for you. This was a complex question and you received many thoughtful suggestions, hope they helped you move on.
0 votes
Daniel Zia &…, Agent, Santa Barbara, CA
Sat Sep 13, 2008
As a follow-up, I would not recommend a long term lease-back. You will want a definite time frame to give your potential security of knowing when he/she will be able to move in. 60-120 days is a reasonable length of time, while still giving additional flexibility to make your move. In the worst case scenario, if you start to get close to that time frame without finding your replacement property you can negotiate a longer time frame with the buyer, or look for a short term weekly vacation rental (if it is a small time gap, i.e a couple weeks).
Web Reference:  http://www.TheZiaGroup.com
0 votes
Daniel Zia &…, Agent, Santa Barbara, CA
Sat Sep 13, 2008
Hi Triplea,

I was just recommending this situation to another client of mine who has a 3/2 house in Santa Barbara to sell, and is looking for a replacement property as well. I'm a strong advocate of the seller-rentback situation, because they then know with 100% certainty how much they are netting from the sale of their house. In our current market, the selling prices are lower than many home owners are expecting, so it's nice to eliminate those what-ifs, before pulling the trigger on your replacement property. Renting-back also gives you the time and flexibility to 1) locate the right replacement property and 2) Come from a position of strength while negotiating with no time crunches to rush this important process. In addition, most sellers are not considering offers from buyers that still have a home to sell, so it doesn't leave you with many choices but to sell your home first. As you know, with pets, especially dogs (we have two beagles), finding a good rental that will take dogs and is willing to start at month to month while you look for a home is near impossible.

I would be happy to take a look at your home and 1) Complete a market analysis of your property to give you an accurate picture of its current value and 2) Discuss with you further specific strategies for making your buy/sell transition smooth and more convenient.

Another service that may be helpful for you as you watch the market, or actively search for your replacement property, is our automatic email home finder. With this service we create a custom search in the MLS for you using your specific search criteria. Then, every week, or at a frequency of your choosing all of the new listings that match your criteria will be emailed to you. It's a great way to learn about, or keep up-to-date on the current inventory in our market and gives you a leg-up on other potential buyers who only hear about properties through the newspaper. If you are interested in having me set you up on this service, please let me know. I also can set you up with one of these searches for new comps for the home you are going to be selling, that way you can keep track of what the market is doing in your specific neighborhood.

Please do not hesitate to email me at Daniel@ZiaGroup.com or call me on my cell phone 805-637-7148. I look forward to speaking with you.
Web Reference:  http://www.TheZiaGroup.com
0 votes
nil nil, , Calico Farms, Kansas City, MO
Sat Sep 13, 2008
The realities of a sell-rent back situation are as follows:

It happens all the time. However, it is almost always a short term arrangement and would have a pre-determined end point. My experience is that asking to rent back until you find and close on a replacement property will likely scare off a lot of potential buyers. (An exception to this would be an investor who would be looking to rent it out anyway.) This will likely mean that you sell your home for less than you would have other wise.

I can understand why you would want to do this. Being a very busy homeowner with pets myself, I don't underestimate what it would take to find and move into an interim rental if you sold your home with out first finding a replacement. Also, you are going about things in the right order: I would not recommend buying your new home without selling your existing.

So, with all of that being said, if you absolutely need to sell with a long rent back, here is what I would suggest:
1. Hire a realtor who can tell you what your home is worth and then price it aggressively.
2. Determine what a reasonable term for the rent back would be: 6 months or until you find a new home for example.
3. Decide what your contingency plan is if a buyer comes along with a great offer, but can't accommodate your full rent back needs.

Good luck and feel free to contact me if you would like to discuss this matter further. My mobile phone is: 805.451.4433

Best Regards,

Michael Day
0 votes
Keith Sorem, Agent, Glendale, CA
Sat Sep 13, 2008
Triples
Normally rent backs are not an issue as long as the buyer knows up front that is your need. Depending upon the market and particular situation it could be a plus for the sale price, or a negative.

I would be honored to refer you to a top Realtor in Santa Barbara that could provide you with specific advice based on your property, personal situation, and the local market trends and values.

You can contact me via my Trulia Profile or call 1-888-284-2056.
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