July 17, 2008 Elad Bushari

With the threat of foreclosure looming for a growing number of homeowners, some are trying more unconventional methods to avoid losing their home. The Wall Street Journal reports that real estate agents are seeing an increase in sale-leasebacks, in which homeowners sell their home and then rent it back from the new owner. Although the concept is neither new nor common, it is becoming more popular, the Journal reports.

Such arrangements might work well for homeowners who are barely making their mortgage payment or who may soon default on their loan. However, some real estate experts are wary of leaseback agreements and warn that, in much of the country, the seller may end up paying just as much for rent as they had paid for their mortgage. My question is: If they can’t afford the mortgage, how will they afford the rent?

Elad Bushari

Elad Bushari is the Broker / Owner of Bushari Group Real Estate and a National "30 Under 30" Honoree by REALTOR Magazine in 2009.

Comment (1)

  1. Here in greater Phoenix we are seeing that buyers are using this strategy as a way to get cash back to buyers from desperate sellers in the from of large monthly rents.

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