A Leaseback is a transaction where the Seller of an asset, in this case Real Estate, leases it back from the new Buyer at closing for an agreed upon rent and terms.
This historically has been a short term accommodation to the Seller when the sale/closing date does not coincide with the date the Seller is able to vacate. Sometimes the Seller’s new home purchase is delayed and rather than moving to a hotel between closings a Leaseback option can be negotiated. This has also been called a Post Closing Occupancy Agreement. Mortgage Lenders are usually understanding of these situations with certain restrictions.
A Leaseback can also be a great long term option if the Seller has not found their new home yet but wants to take advantage of a strong market. Companies, such as Sell2Rent.com offer the opportunity to match a Seller with a Buyer/Investor willing to Lease the house back to them for an extended period of time.