A rent back agreement allows a seller to stay in the home until a specified date past closing. After settlement, the seller pays rent to the buyer, who now owns the home. The sellers are now renters and tenants of the home, with a security deposit being held in case of any damages.
Specifically, a rent back occurs when the buyer closes on a home and then leases back tenancy to the seller. This usually occurs when the seller needs more time to vacate the home, in which case, the buyer becomes a sort of landlord and receives payment from the seller for every day they remain in the home.