Sale leaseback is a relatively new concept in real estate. You’ve likely never heard of it for that reason, but we here at Easyknock believe the idea has a big future. It gives homeowners a new housing option that they likely never imagined. It allows them to sell their home and still live in it.
In a sale leaseback an individual or company would purchase the home, and provide a lease agreement to the seller, to remain in the home, as a tenant. The owner-turned-lessee would simply make a monthly payment, and continue to live in the house! The terms of these leases vary, but generally speaking, a longer lease would allow for a lower monthly payment.
It seems a little counterintuitive when you think of all the advice that people receive about home buying; for example, that buying is always a better idea than renting. However, there are many reasons why sale leaseback might be a great option for some people. I’ll cover some instances where sale leaseback might be not only viable, but an ideal scenario.
If you need actual money instead of a long-term investment like a home, but you don’t necessarily want to give up living there, a sale leaseback can help you. This need for liquid assets could be due to job loss, early retirement, or other life events. The money may be used to pay off debts or to cover medical bills. Whatever the reason, there is a time in almost every homeowner’s life where this option might offer a solution.
In some sale leaseback contracts, the seller is offered the option to buy the home back. This option could be perfect for people just trying to get their heads back above water, like in the case of job loss. It is a way to buy some time to get finances straightened out and avoid foreclosure without altering a homeowner’s lifestyle.
A Sale leaseback is great for people who are looking to sell their home, particularly when the market is skewed towards sellers and inventory is low. It can give people the chance to find their dream home or even to build it from the ground up. It buys time to make the transition, allowing people to avoid moving all their belongings multiple times. It takes the time crunch out of house hunting.
Say the housing market is absolutely fantastic and your home is now worth more than ever and you’re worried the boom won’t last, but you’re not quite ready to move just yet. Or maybe you’re not sure that the market is going to hold and you’re worried that you’ll lose money if you wait to sell. That’s not a problem with a sale leaseback. You can stay in your home, but get out from under the mortgage.
The reasons why a sale leaseback might be a good option are as varied as homeowners themselves. Head to EasyKnock to learn about their residential sale leaseback plan, Sell and Stay, which offers a buyback option.