Further Reading

Many homeowners were lured into buying by adjustable rate mortgages which allowed them to purchase a home with a payment they could afford, but also one which could go up at any time. As interest rates rise, more and more homeowners are finding themselves in over their heads and unable to pay the new, higher mortgage payments. The options open to them are limited and not very attractive: they can take bankruptcy, they can default on their mortgage, or they can just give up and let the bank take the house back.

Another choice is called the "rent back house" option. Under this program, you agree to sell your house to a buyer for a given amount, retaining the option of renting the house back from him. In fact, the buyer may agree to a "sell and buy back" plan in which he will actually sell the house back to you again when it becomes financially feasible.

Rent back house agreements are, to an extent, "win-win" situations. The seller gets to stay in their house, which is comforting as well as non-disruptive. The buyer not only acquires real estate, they get a steady income stream, and a motivated buyer (presumably) once their economic situation improves.

This program however, would not only benefit those people who knowingly got tricked into getting an adjustable rate mortgage, or even those who knew exactly what they were doing, but many other people stuck with a bad loan due to the many reasons banks are allowed to do such things. Some of the reasons might be personal problems such as getting divorced, unpaid medical bills, bills or loans going to collection or other legal matters.

If you are a seller who may encounter this type of situation, you ought to ask a realtor, or search the web for "rent back house" options. For this type of situation, it is imperative that you use an attorney to protect your real estate interests and to help you negotiate the best overall deal for you.

If you are considering investing in this option, search under "homes on sale and rent back" or consult with a realtor yourself. This is, however, a "buyer beware" situation for you. Be sure you also have an attorney involved and that you thoroughly check out the buyer to determine if they are reputable.

An increasing number of homeowners are suffering in the sub-prime mortgage debacle. They may declare bankruptcy, go into default, or walk away and let the bank repossess the house. There is another way. You can choose the "rent back house" option. When you sell your house, get the buyer to agree to rent it back to you. He may even let you buy the house back eventually. This is called "sell and buy back". If you are considering investing in this option, search under "homes on sale and rent back". Be sure you to get an attorney and check out the buyer to determine if they are reputable.