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    Most real estate buyers are not buying to be landlords – Rent Backs

    A Tip regarding “Rent Backs” from the REMAX of Valencia CA Paris911 Team of Realtors.

    What is a Rent Back?

    Protecting our real estate clients since 1998When buying real estate, part of the “deal” maybe you allowing the present owners to remain in the property, you are buying, after it closes and you become the new owners.

    This is known as a “rent back” and it’s not too uncommon.

    Why would a buyer agree?

    If there is a lot of activity on a home, regarding offers and interested buyers, sellers can typically get anything they want. This includes asking the new buyers to allow them, for a fee, to remain in their home for a previously agreed amount of time.

    “For a Fee”.  This is where a buyer can get into trouble. PITI – Principal, Interest, Taxes and Insurance.

    This is the “typically” agreed upon “Fee”.  This is what constitutes the payment on a Financed Home.

    Other Fees

    However, this does not include Homeowners Association Fees and Dues. It also does not “always” include “Mortgage Insurance” or M.I.

    That is where the trouble can lie. Sometimes, crafty agents representing the real estate sellers are not offering to have the “rent back” cover those additional fees.

    Sometimes, this is missed by the agent representing the buyer. Escrow should be a neutral party, potentially pointing out that the buyers are going to have to come out of pocket during the duration the rent back was agreed for.

    But, we are not in a perfect world and it’s seems that some people in various walks of life only do “enough” to get by…

    Ask Questions regarding Rent Backs

    Make sure you are covered if you are going to enter into one of these “rent back” agreement with those you are buying your home from.

    Talk with your realtor and make sure, if you have a Homeowners Association, those dues are also included. And if you put down less than 20% you probably have M.I. (Mortgage Insurance) attached to your payment.  Make sure this is covered too.

    Heck, just ask, “is everything covered with regard to my “out of pocket” expenses for every day I’m allowing the previous owner to rent my home back from me?”  

    Then ask for a breakdown of what they are paying, see what your payment is, and compare the two.

    Keep safe – thanks for reading and sharing.

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    Paris and Connor MacIvor

    Connor and Paris MacIvor are in the Top 1% of Realtors Nationwide, starting their real estate business in 1998 with RE/MAX Gateway - Santa Clarita Valley and Valencia CA. Their becoming licensed real estate consultants and representatives came from the horrible experience they had when they bought their first home. There were many things that the agent they had hired did not explain and disclose, which per law he should have. Getting that agent on the phone after they closed escrow and after he had gotten paid was impossible. Paris and Connor called the broker, the board of realtors, the office manager and all they received was the promise of a phone call back. The remedy did come, but not as fast and in the way they wanted. That act - that bad agent was the reason why Paris and Connor became Realtors. That was all they needed to vow to never let the same fate befall anyone else, that befell them. Today Connor and Paris are focused on client service. Protection and top-shelf service with regard to their real estate clientele. They primarily work within the Santa Clarita Valley and Valencia CA. However, for a referral, where 80+ of their business is referrals they have License and Will Travel to other parts of Ventura County, Los Angeles County, and Orange County to handle real estate transactions for those who trust their real estate operation. Writing on their Real Estate Blog is a passion. SCVnest.com/blog is where you will find over 10,000 real estate articles. Go to SCVnest.com/radio to listen to their latest real estate radio broadcast.

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