What is a rent-back or post-possession agreement?

A rent back or post possession agreement allows the seller to remain in the home for a period after closing, essentially renting it from you as the new owner. This is common when sellers need extra time to move, are waiting for their next home to close, or have timing constraints. The agreement specifies the length of the occupancy, the daily or monthly rent amount, the deposit or holdback from proceeds, and who is responsible for utilities, insurance, and maintenance during that period. In Arizona, this is typically handled through an addendum to the purchase contract or a separate agreement prepared at closing. It adds risk because you own the home but do not control it, so clear terms and timelines are important.