Seller leaseback vs. extending escrow period

[Sean Bramble]

Hey BP! I'm in escrow on a property and the seller has asked to stay for an additional 2 weeks before moving out. What are the pros and cons of doing a leaseback to the seller vs. just extending the escrow period?

Also, are there any other creative strategies related to leasebacks I could use to alter the mechanics of this investment itself? Can't really imagine how that would work, but anytime money is changing hands I assume there is some opportunity to factor that into my loan somehow? Long shot, but wanted to ask the hive mind just in case. Thanks everyone!

[Dustin Allen]

@Sean Bramble

Most sellers want a lease back so that they can have their money and make plans before moving on. If your seller is content with closing two weeks later instead, definitely take that option if it doesn’t affect your loan.

If they need the leaseback, be sure to hold a significant security deposit in escrow. Also, there is usually a charge for the leaseback. It should be at least the amount of your PITI payment but nothing says it can't be a little more either. The deposit is the most important as that is their incentive to get out when the time comes.