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Have you seen offers to “unlock” the equity in your home by selling it and then renting it back from the buyer? The ads make these agreements — called sale-leasebacks — sound like a simple and risk-free way to get cash upfront and stay in your home. But the truth is these agreements are far from risk-free.

When you agree to a sale-leaseback, you’re selling your home and becoming a renter. The risks — often hidden in the fine print of complicated contracts — include hefty fees, exorbitant rent, and even eviction from your home if you can’t afford to pay the rent when it goes up. (And it often does.)

If you’re considering a sale-leaseback, here’s some advice:

  • Take your time. If a buyer pressures you to act immediately, walk away. Selling your home is an important decision. Anyone who rushes you doesn’t have your best interests at heart.
  • Read the fine print. If your agreement is different from what the buyer promised or is too complicated to understand, stop.
  • Hire a lawyer or involve a trusted family member or friend. Home sales contracts are often complex. Hire a lawyer — or ask a trusted person — to help you review the documents and understand the contract terms.
  • Know the risks. If you go through with a sale-leaseback agreement, you won’t own your home anymore. That means you could be forced to leave your home if, for example, you can’t afford to pay the rent.

Before you borrow against your home or respond to a sale-leaseback offer, learn more from the FTC. And if you experience a problem or scam, tell the FTC at ReportFraud.ftc.gov. 

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The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

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