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The Pros And Cons Of A Lease Forward (Or Lease Back)

Once upon a time, not so long ago, there was a family of investors who loved their job and all that it entailed. They had gotten a great deal on a property, and although it was further away then they would have liked, the price was right.

There were a couple of questionable issues: It needed some foundation work, and it had a pool which can be scary. All in all it was a great property. After the remodel, the house was listed and though it did sit a little longer on the market then this happy family would have liked, it finally went under contract. The spectacular listing agent (that would be me) thought she had done all of her homework with the lender and the buyer's agent and felt assured that the property would close in the prescribed time alloted. Even though it was a VA loan. And even knowing that the lender had some issues in the past closing another deal on time….<Insert wishful thinking here> So ten days before closing, when asked by the buyers agent if a lease forward might be possible for her clients to make the transition more smooth for them (they were selling a house 3 hours away) we agreed.

The Problem…

Fast forward to the day before closing. The sensational listing agent was hard at work at her desk wrapping up for the day when she received a disturbing call from, not the buyers agent or the lender but from the title company informing her that closing was not taking place the next day. After a flurry of phone calls to get to the bottom of the situation, the listing agent discovers that not only is the property not closing the next day, it's questionable as to when or even IF the property is going to close. In the meantime, the buyers have moved in. This happy investor family has now become a landlord. They were not so happy anymore.

To make an incredibly long story short, the property did end up closing almost 3 1/2 months after originally planned. In the meantime, the buyers settled in and began contacting us about issues that came up on their inspection report that they never asked us for during option. Things like hose bib leaks, kitchen sink drainage, etc. Suddenly now because we were the landlord, it was a like a free card to ask for the moon. Let me just say, it was a painful 3 months. Read more