What is a “lease-back” agreement?

A "lease-back" agreement is an arrangement commonly used in real estate transactions where the seller of a property maintains the ability to use the property even after it has been sold by leasing it back from the buyer. This agreement allows the seller to continue operating their business or living in the home while freeing up capital from the sale.

This type of agreement is often beneficial for both parties. The seller can access cash without having to vacate the property immediately, which can be particularly useful if they're in the process of relocating or transitioning their business. On the other hand, the buyer gains a tenant who typically has a vested interest in the property, providing them with a reliable income stream.

In contrast to other options presented, a lease-back is not about reselling the property, is not limited to rental contracts, and does not directly pertain to methods of financing a purchase. It specifically emphasizes the leasing aspect after the sale has occurred, making it a unique tool in real estate transactions.