Home Equity

What Is a Sale-Leaseback?

By Tom Burchnell

In the world of finance, there is no shortage of options. But most of those options are convoluted and confusing, filled with hidden fees and catches that can put you in a worse-off situation than where you started. 

A sale-leaseback is a new take on those traditional options. But instead of a loan, it works like this:

You sell your house to a third party for a predetermined amount. However, instead of moving out after the sale, you receive a lease to stay in the home as a renter. You receive the cash from the sale, which eliminates your mortgage, homeowner’s insurance, HOA, and property tax payments. Now, all you have to pay is the monthly rent and renter’s insurance. This frees you up and gives you the money to get where you want to be. Whether you eventually want to move out, or repurchase the house, a sale-leaseback gives you the flexibility that no other option does.

The sale-leaseback concept has been commonly used in commercial real estate. However, EasyKnock is the first organization to bring the idea to the residential real estate market. Now, homeowners can work with EasyKnock to receive the benefits of both homeownership, renting, and a home sale without the hassles of a mortgage or moving out. 

How Is a Sale-Leaseback Different from a Loan?

When you decide to go with a sale-leaseback for your financial needs, you are essentially deciding to no longer own your home. This may sound like a scary concept to many, but it doesn’t have to be.

By definition, a loan is something that must be repaid and by a certain time. This can come with added fees, added stress, and can ultimately leave you in a tough financial spot when it was supposed to make life easier. 

EasyKnock does not provide loans. We convert your home equity into cash, meaning we buy your house, ridding you of your mortgage and giving you the cash you have been building up in it. The house is still yours to occupy, but instead of paying a mortgage, you pay rent. The cash that you received never had to get paid back. 

If you decide you want to repurchase the house later, you would pay the amount it was purchased for by EasyKnock with a traditional mortgage, thus regaining ownership of the property.

With EasyKnock there are no loans and no mortgage payments. We take that on, freeing up your cash to be used how you see fit.

Is an EasyKnock Sale-Leaseback Right For You?

A quarter of American homeowners have found themselves with equity built up in their homes with no way of accessing it. Bad credit, nontraditional income types, high debt-to-income ratio, and other factors have caused banks and lenders to exclude people from getting the cash they need and have worked so hard for. That’s why EasyKnock decided it was time to make a product that worked for the average homeowner.

EasyKnock knows that every homeowner is different. That’s why we look at your full financial picture, not just your credit score and income type. We work with you to create a personalized solution that helps you reach your goals on your timeline and budget. 

Another factor that sets EasyKnock apart is that we provide a wide range of options for our customers. While we also provide ways for our clients to stay with us indefinitely, we pride ourselves on offering a temporary solution that helps get homeowners where they need to be. Whether they want to eventually buy back the home later, when they have reached other financial milestones, if they want to eventually move out to a different location, or even stay as a renter in the home they love for years to come, EasyKnock can accommodate those desires. 

When you choose EasyKnock, you can decide to:

  1. Repurchase the house when you’re ready for the price it was bought by EasyKnock for
  2. Move to a new house and have EasyKnock sell the property on the open market. In this instance, you would receive any appreciation on the sale.
  3. Stay as a renter indefinitely. If you decide that renting is the right path for you, we allow our customers to continue as a tenant for as long as they want.

Key Takeaways

If you’re tired of jumping through hurdles and obstacles only to face rejection after rejection for traditional lending options, or tired of mounting debts that keep you from getting back on top of your finances, EasyKnock may be the solution for you. Talk to a financial advisor today to determine if EasyKnock might be a good solution for you.

Topics:
EasyKnock
Sale-Leaseback
Tom Burchnell Director of Product Marketing for EasyKnock, licensed real estate agent.

This article is published for educational and informational purposes only. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process.