“Hi Gary. My wife and I are very interested in a home we just saw. I was told the seller wants to rent the house back for 30 days. If we make an offer, what rent should we expect them to pay?”
***ANSWER:
Rentbacks are usually requested by the seller, as is your case. So the generally accepted practice is the seller pays the greater of the market rent or your total loan payment (principle, interest, taxes, insurance, + any homeowner fees).
However, in the unlikely event that it’s the buyer who wants the seller to rent back, such as if the buyer needs an unusually quick escrow and the seller needs some time to get out, the approach would be different.
The rent would be between the market rent and whatever the owner is paying now. I’ve seen things get sticky with long-time owners, often senior citizens, who have no mortgage and a low tax base and pay as little as $100 per month. Asking them to pay $3,000/month rent isn’t going to fly. So expect to get minimal rent in return for them closing early.
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