Could anybody out there explain to me what a leaseback is? the term is used with regard to real estate?
Answer:
If you are looking for a house for sale and it has a lease back the seller probably wants to sell now, but needs to stay in the house for a set amount of time.. maybe to move or to find a new home.. or waiting for a home to be built.
So they usually set a certain amount that they will pay the buyer for the set amount of months they need to lease the home for once it has been sold from to the new owner.
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A lease back is when a seller sells the property to a buyer and immediately leases the property back from the buyer. Also known as a seller occupancy agreement
Sale-leasebacks are common in commercial R/E. The Seller conveys title to the buyer and leases the property back from the Buyer. There are certain tax advantages to doing this and that is why it is common.
Don't confuse with a "Seller carryback" which is when the Seller creates a mortgage with the Buyer and takes back a note.
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