Expert: Sue Bernstein - 1/25/2005

Question
My mother-in-law is selling her home to move into a condo, which is not yet complete. The people who want to buy her home say they need to close soon for tax reasons, but they are willing to rent the home back to her until her condo is ready. I'm a little skeptical of this approach. What do you think? Thank you. (My mother-in-law lives in Wilmington, North Carolina.)

Thank you.  

Answer
Dear Larry,

Rent backs are a common practice when it is acceptable to both sides.  The rent back amount is usually the buyers' loan plus taxes plus insurance.  I am not sure what it is about the arrangement that you would be skeptical about.  Your mother in law is lucky to have cooperative buyers.

Sue Bernstein