5 Questions To Ask When Considering a Residential Sale Leaseback

If you’ve decided that a sale-leaseback program is right for you, it’s time to consider which company offers a program that will fit your needs.

After all, the process of selling your home and renting it back may vary depending on which program (and which fast cash buyer company) you choose. 

In this article, we'll cover the 5 questions you should ask before you choose a residential sale leaseback program.

Ask These 5 Questions Before You Choose a Residential Sale Leaseback Program

Before we dive into the questions, write down these four pieces of financial and logistical information. Having these ready will immediately show you whether a provider's program is a realistic fit for your situation:

1. Your Current Mortgage Balance: A leaseback company must pay off your existing liens at closing. Knowing your exact payoff amount helps you calculate the actual net equity you'll walk away with.

2. A Local Market Estimate: Look at recent sales of similar homes in your specific neighborhood to get a baseline idea of your home's current market value.

3. Your Monthly Rent Target: You're transitioning from owner to tenant. Know exactly what dollar amount you're comfortable paying monthly out of your newly unlocked equity.

4. Your Ideal Timeline: Decide how long you want to stay in the home. Some sellers only want a 3-6 month window to while they shop for a new place, while others want to stay put for a few years before making their big move.

1. What is your qualification process?

The company you are asking should provide a detailed step-by-step qualification process. 

A professional company is likely to mention the evaluation of your property, financial situation, and the terms of the leaseback agreement. They will not shy away or dismiss your questions, and they will offer advice (no strings attached) on your options for selling your home.

An unprofessional company will give you vague options and promises that sound more like a scam than an agreement.

Beware of any companies that ask for payment for services before a sale-leaseback agreement has been signed. It's often the sign of a scam.

2. What is a typical timeline for a residential sale leaseback?

The typical timeline for a residential sale leaseback program will vary from company to company, but a reputable partner will outline the various stages of their process, including property evaluation, offer presentation, negotiation, and closing.

They should also provide an estimated timeframe for each stage.

The timeline for the lease should be a reasonable range, from a few months to a few years. It should also be negotiable.

Reputable partners, like Sell Then Stay, want to work with you on your ideal move-out date, so that you can plan accordingly.

You should be wary of anyone providing a vague answer without real milestones or deadlines, especially if they come off pushy. Most companies are responsive, so if you feel an agent is trying to take advantage of your situation, say no thank you and call the next number on your list.

3. Do I have to move out?

The answer will always be an eventual yes with a sale leaseback program, but each company will have different specifics, dictated by the timeline you learned to ask about above.

The terms should be agreed upon with your input, allowing you time to access your home’s equity without having to uproot your family suddenly. Instead, you can build your wealth and plan the next chapter of your life.

A bad answer would be misleading, promising that you can stay forever or giving you a set move-out date without your input.

4. How much can I get for my home?

The amount of money you can get for your home in a sale leaseback will vary, but a reputable company will base its offer on thorough research and assessment of your property's market value.

A good answer would include asking for information about your home and giving you a fair, fast cash offer.

The company should be upfront and honest about how fast cash offers are typically a bit lower than what you may get should you sell your home through a real estate agent.

That lower total offer comes with the benefits of no realtor commission fees, no repair costs, no open houses, and a lack of other expenses.

A bad answer would give you an indefinite range or an exact amount without researching first.

5. Who takes care of closing costs and associated fees?

In a sale-leaseback transaction, a good company will be transparent about who covers the closing costs and associated fees, whether it's you, the company, or shared between both parties.

The red flag answer to this question isn't "you will be responsible for covering the fees," as sometimes this is the process legitimate agents follow, and their cash offer should be generous enough to make this a non-issue.

Instead, the red flag answer is one that's vague or hides junk fees (like junk administrative charges or unverified escrow costs) until closing day.

A Residential Sale Leaseback Program That Works for You

When considering a residential sale leaseback, ask the right questions so you can feel confident when it’s time to pick your program.

With Sell Then Stay AZ, you can explore all your options and meet with experienced professionals to discuss our process, understand your program options, and receive an estimated offer.

If you're ready to explore the benefits of a sale-and-leaseback program that ticks all the boxes, don't hesitate to contact Sell Then Stay AZ today.