Sale-Leaseback

A sale-leaseback is a real estate transaction in which the new owner leases the property back to the previous owner for a specific amount of time. Occasionally, this is necessary to close the sale. Circumstances arise when there needs to be flexibility in the vacating of the property. Sellers may ask to lease back property in the sales contract when they find that they will be unable to move in a timely manner. This may be favorable to buyers when they find that they are stuck in a lease of their own. Another sale-leaseback situation may involve a family having trouble with high-interest mortgage payments. They may be unable to refinance the home due to credit or home values. A buyer could lease back the property after securing a lower interest loan, which would make the rent payment affordable.