Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What type of agreement involves selling a property and then leasing it back?

1. Option Agreement

2. Sale-Leaseback Agreement

3. Graduated Lease Agreement

4. Cash Flow Agreement

The correct answer is: Sale-Leaseback Agreement

A Sale-Leaseback Agreement is a financial transaction where the owner of a property sells it and simultaneously enters into a lease agreement to rent the property back from the new owner. This type of arrangement is often used by businesses to free up capital while still retaining the use of the property for their operations. By selling the property, the original owner can gain immediate cash flow, which can be reinvested or used for other purposes, while the lease allows them to continue occupancy and use of the space. In contrast to the other options, an Option Agreement typically gives a buyer the right, but not the obligation, to purchase a property under specified conditions. A Graduated Lease Agreement outlines a lease with increasing rent amounts over time, rather than focusing on a sale and leaseback scenario. Lastly, a Cash Flow Agreement pertains to the distribution or management of cash flow rather than the leasing back of sold property. Therefore, the Sale-Leaseback Agreement is uniquely identified by the combination of sale and leasing elements, making it the correct answer.