Considering selling, hoping to rent back my home

You want the money gone, not the home.

It is not the house you are trying to escape. It is the mortgage. You would keep every other part of this place if you could: the school two streets over, the neighbors who wave, the doorway your kids have measured their height against. So you find yourself asking a very specific question, quietly, because it hurts to ask but also feels almost too good to be real. Can I sell my home and then rent it back and keep living here?

The excitement this is real

It absolutely exists but you just need to find the right buyer. So no, you did not imagine it, and you are not asking for something strange. It is a recognized agreement, called a residential sale-leaseback and people in your exact position ask about it all the time. The dream underneath your question, sell the debt away but stay in the home, is a real option. You just need to know if you have time to execute it. If you do, I want to walk you through what is on the other side before you step any further.

To protect you, not scare you

Here is the honest part, this very deal you are hoping for, is the same shape that dishonest people have used to strip families of their homes in the past. Colorado saw that happen enough times that it wrote a whole law about it, the Colorado Foreclosure Protection Act, built specifically to protect distressed homeowners from deals designed to quietly take their home or their equity (CRS 6-1-1101, 6-1-1102). I am not telling you this to scare you off the idea. I am telling you because that same law is now standing behind you, and knowing what it guarantees you is exactly how you tell a real offer from a trap.

Nothing real happens on a handshake

If a deal like this is real, it lives on paper before you ever sign away anything. Colorado requires a written contract, signed and dated by both you and the buyer, before you sign any deed or document that transfers your home (CRS 6-1-1111). And that contract cannot be vague about the part you care about most. It has to spell out, in writing, the full price the buyer pays and the terms of your lease, down to the specific dollar amounts (CRS 6-1-1112(1)). Your rent cannot be a promise made across a kitchen table. If someone wants those terms to stay verbal, that itself is your answer to walk away from that transaction and find someone else. I know it can be daunting to move on, but we at Transitus are happy to help you.

Time to change your mind, guaranteed

If you do find a legit buyer that is great news but it can also come with questions on if it’s truly the right path or a fair offer for you. What’s important however, is you are not locked in the second you sign. Colorado gives you a built-in right to cancel: you can back out until midnight of the third business day after you sign a proper contract, or until noon the day before a foreclosure sale, whichever comes first (CRS 6-1-1113(1)). And here is the protection I most want you to hold onto. Until that cancellation window has fully closed, the buyer cannot have you sign a deed, cannot record anything, cannot take or borrow against your home, and cannot pay you a dime (CRS 6-1-1112(1)(j), 6-1-1117(2)). So if anyone rushes you to sign the deed today, or slides paperwork across before that window is even open, they are breaking the law, not doing you a favor.

A dream of buying it back again

Because staying in the home is the whole point, you can even put a buy-back clause in your contract if the buyer accepts. That type of agreement is called a reconveyance and it gives you the option to buy your home back later so you can own it again (CRS 6-1-1115(1)). In the perfect world, some people would sell with both a sale-leaseback and a reconveyance agreement to stay in their home the entire time while getting ownership back down the road.

In a reconveyance, you get a nonwaivable thirty-day right to cure if you fall behind on the deal, and you can use that cure right at least three separate times over the life of the contract, and no contract can sign that away (CRS 6-1-1115(1)(b)). The buyer is also required to check that you can actually afford the rent and the repurchase before they do the deal; the law presumes you can only afford it if your housing costs plus your other loan payments stay at or under sixty percent of your gross monthly income (CRS 6-1-1115(1)(d)). And they cannot make the buy-back a fantasy price: if the price to buy your home back is more than twenty-five percent higher than what the buyer paid to acquire it, the law presumes the whole contract is unconscionable (CRS 6-1-1115(1)(c)). None of this is on you to enforce. It is simply the floor a legitimate buyer has to clear if you go down this path.

There are many doors available if this doesn’t work

What you are really asking for is to keep your life intact while the weight of this mortgage lifts off it. That is a fair thing to want, and it is not too much to ask. You do not have to work this out by yourself and a sell-and-rent-back deal may be right for you, but if you have enough equity to simply walk out clean it could be valuable to see what other options there are, and we at Transitus can show you the full picture.

This article is general information from Transitus, not legal, financial, or tax advice. Foreclosure rules change and every situation is different. Transitus is not a foreclosure consultant (CRS 6-1-1103) and charges no upfront fees. For free help, call the Colorado Foreclosure Hotline at 1-877-601-HOPE or consult a Colorado real estate attorney.