We at ICI Homes thought you might like us to define some of the terms used in the homebuilding industry.
Unfamiliar slang and jargon can confuse potential customers searching for, or building, a new custom Florida home. And who wants to go through such an important process feeling like you need a Homebuilding 101 translation app on your smartphone?
If you don’t understand a term, your alternatives are to (A) simply ask for an explanation, (B) pretend you know what the term means, or (C) google the term once you’re out of sight of the person who used it!
Our goal is to help, not overwhelm. We all know folks who are hesitant to ask for explanations, so look for periodic posts on our website that spell out and define mystery jargon.
Today’s term is “leaseback.” Let’s dive in.
It’s a financial and real-estate term
Literally, a “leaseback” is exactly that.
Someone sells a piece of property to someone else. The buyer of that property then leases it back to the former owner for a finite period of time.
“Leaseback” also is the name of the monetary transaction, which is the legal agreement between the property’s new owner and the former owner who’s now leasing it.
How it applies to homebuilding
Say you’re searching for a new home in the Sunshine State and discover one of our master-planned communities. Or, you discover us in someone else’s master-planned community where we’re a preferred builder.
Either way, you’ll likely tour our model homes in that community. As a prospective home buyer, you know you have the option of having us build your own custom home, or selecting one of our stock homes — a popular floorplan built for quick move-ins.
But suppose you fall for one of the model homes?
So you want to buy a model home
Timing is everything, of course, but let’s say the model must continue being a model for several months or a year. And you love everything about it, and it’s perfect for you and your household — maybe even down to the furnishings on display!
Here’s the key: you can’t be in a hurry to move. We’ll need the model home to continue to do its thing until the community — or that phase of it — is complete. And yes, the model homes also get sold. Just usually at build-out.
You don’t want your dream home to get away! Nor do you want to wait until build-out to buy it. Nor do you want to risk someone else deciding it’s their dream home too, and beating you to it while you’re waiting for the community to sell out.
Buy it as a “leaseback”
Enter today’s homebuilding term.
You’ll work with us to buy the model home, then lease it back to us for continued use as a model home. There are all sorts of benefits to this. Perhaps the biggest is that someone else pays the monthly mortgage payment and bills during the “leaseback” period.
But don’t forget these perks: you can nail down the home price and mortgage interest rate well ahead of time. And, if you’re buying the model fully furnished, most of the usual hassle of moving is moot.
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