How to Sell Your House and Rent It Back

You can sell your house and rent it back by using a rent-back agreement. This arrangement lets you close on the sale while staying in your home for a set period as a renter. It’s a practical option if you need more time to move into your next place. According to Zillow data, a majority of dual seller-buyers (54%) said they sold first and then bought, showing how often sellers face a timing gap.

What is a rent back?

A rent back is when a seller stays in their home after closing by paying rent to the buyer. It gives sellers a short-term solution if their next home isn’t ready or they need time to complete their move.

Usually, rent-back agreements last less than 60 days. During this time, you live in the home as a renter, paying the buyer a daily rate based on mortgage costs or fair rental value. The buyer officially owns the property, and you agree to move out on the date specified in the contract.

How does a rent-back agreement work?

A seller rent-back agreement is negotiated before closing and written into the contract or a separate addendum. Your real estate agent or the closing attorney will draft the paperwork, and both you and the buyer must agree to the terms in writing.

Duration of lease

The process starts with negotiating the terms. You and the buyer will decide how long you can stay, how much rent you’ll pay, and whether a security deposit is required. Some seller rent-back agreements are often short-term, possibly due to local or state laws converting a rentback to a tenancy, or due to lender primary residence requirements. The move-out date is fixed, so you’ll need a clear plan for where you’re going next.

Rent payments

Rent is typically based on the buyer’s monthly mortgage payment (including principal, interest, taxes, and insurance) or the fair market rental rate for similar homes. The total is then broken down into a daily rate. Buyers sometimes collect a security deposit up front, just like a landlord would, to cover potential damage.

Responsibilities

The rent-back agreement also defines who is responsible for what while you remain in the home. You may have to pay for utilities, keep the property in good condition, and cover minor maintenance. The buyer, as the new owner, maintains homeowner’s insurance, but you may need renter’s insurance to protect your belongings.

Lease end date

Finally, the rent-back agreement covers how and when your occupancy ends. On the last agreed-upon day, you must move out so the buyer can take possession. If you stay past the deadline, the buyer probably has the right to begin eviction proceedings.

Is a rent-back agreement a good idea?

A rent-back agreement can be a good idea when both parties agree on clear terms. Sellers gain time to prepare for their next move, and buyers benefit from short-term rental income.

Benefits of a rent-back agreement for sellers

• Additional time to close on or move into a new home
• Savings on temporary housing or storage costs
• Less stress from moving twice in a short period

Benefits of a rent-back agreement for buyers

• Rental income to help offset mortgage and closing costs
• Can make an offer more appealing to sellers in a competitive market
• Timeline flexibility or delaying their move-in date 

What are the risks of a rent-back agreement?

Even if a seller plans to leave quickly, delays closing on their next home or unfinished repairs can sometimes disrupt a buyer’s move-in plans. Meanwhile, buyers may be facing the deadline to vacate their own rental, meet a mortgage lender’s occupancy deadline, or coordinate with movers.

Risks of a rent-back agreement for sellers

• Closing or paperwork delays on the next home
• Contractor setbacks that push back the move-in date
• Penalties or legal consequences for overstaying
• On the hook for fixing any major damage that occurs

Risks of a rent-back agreement for buyers

• Delayed move-in if sellers request more time
• Complications meeting lender occupancy requirements
• Disputes if sellers fail to leave as agreed or in poor condition

No matter how short the stay, every rent-back agreement should be in writing. A signed contract protects both sides by setting a fixed move-out date, outlining rent, and defining responsibilities during the seller’s occupancy. Consider talking to a lawyer about the best way to memorialize your agreement with the buyer.

Should you sell your home and rent it back?

Selling your house and renting it back can work well if you need a short transition period before moving. The arrangement is most successful when the agreement is specific, the buyer is on board, and you know exactly where you’re headed next.

For sellers, the main advantage is gaining time to complete your move without scrambling for temporary housing. Buyers, in turn, get rental income and a more flexible timeline for when they can take possession. The key is having everything in writing.

If you’re considering a rent back, working with a Zillow partner agent can make the process easier. An experienced agent can help you sell your home with ease. For more selling tips and guidance, visit Zillow’s Selling Resources page.

This article is provided for informational purposes only. It is not real estate, legal, tax, or financial advice. Speak to a licensed professional for personalized advice specific to your needs.