Foreclosed Homeowners Take a Cue from Commercial Real Estate

Across the country homeowners at risk for foreclosure are selling the family home only to turn around and lease the same property from the new owner.

For years it’s been going on in the commercial real estate market. Owners who cannot afford their space have sold the property only to turn around and lease the same property. This practice, known as a leaseback is becoming popular with residential property owners. When homeowners can no longer afford their mortgage or are close to foreclosure they will sell the home and then offer to lease it. This way they get to stay in the family home without assuming any of the risk involved with being a homeowner.

Across the United States this practices is slowly growing and those who support it believe leasebacks are an obvious choice for financially strapped owners. In California and markets hit the worst following the failure of many lenders, its becoming commonplace to see parents save their children from foreclosure by using this practice. Of course it’s not always family members who are involved in leasebacks. Total strangers are taking advantage of the situation and are in turn making a profit off of their new property.

It might not be the optimal situation for keeping your home, but as more and more people explore their options leasebacks are becoming a viable alternative to foreclosure. In many areas a leaseback participant can lease or rent the same home they were paying a mortgage on for just a fraction of the cost. What’s even better is that they don’t have to pack their family up and move them to a strange place just because they got in a bit of a financial bind.