Thursday, February 07, 2019 / by Amber Tice
Selling a property involves the basics of preparing the home and allowing access to potential buyers. When the property is still occupied by tenants, the process can become more complicated. Tenants in the middle of a sale can find it difficult, or even burdensome to keep the home in show-ready condition and allowing quick access to the property is certainly a disruption to their home life. It’s a fine line a landlord walks when dealing with selling a property with tenants. It’s important to remember that this is their home, and working things out with the tenants ahead of time is the best way to alleviate as much stress as possible for everyone involved, including the buyer, and the buyer’s agent.
Fortunately, by following a few simple tips, you can minimize the impact on the current tenants while still selling the property for the best possible price and terms.
6 Tips to Selling a Home with Tenants
- Plan Well in Advance: A well thought out plan will show the tenants and the buyers that you are prepared and ready to sell the property.
- Communicate Early and Often: There is nothing complicated here, clear communication about the process and timing will alleviate the anxiety of the tenants.
- Offer Financial Incentives: Consider offering some kind of financial incentive for their cooperation in moving schedules and showing requests.
- Create a Showing Schedule: Work with your tenants to create a window of time each day/week for showings to minimize impact.
- Provide a Cleaning Service: Make it as easy as possible for the tenants to keep the home clean and show-ready.
- Be Flexible and Understanding: Above all, be willing to compromise when necessary
As a landlord you have a couple different directions you can go in if/when you decide to sell:
Waiting for the lease to expire or;
Sell with tenants
If you decide to wait for the lease to expire:
This will allow time for updates and cosmetic fixes that you may have otherwise not been able to accomplish while someone was living on the property. Waiting for the lease to expire also alleviates timing issues with the closing. It could be difficult to get tenants to move out by the closing date. If this happens as the landlord and owner, you will be responsible for the mortgage and this could go on for months. It takes time to get tenants out, do the repairs, list the property, accept an offer, and go through the closing process.
If you decide to sell with tenants:
Home staging is already done if you have tenants who keep the home looking nice. This is an attractive situation to investors, as they will not have to find tenants for the property which could take some time. If an investor has to find tenants they are, again, responsible for the mortgage until the unit/property has been filled with a qualified tenant.
Selling a property with tenants can be a very successful and painless process if done correctly, and with sensitivity to everyone involved. It’s also worth the effort to find out if your neighborhood consists of mostly renters, or homeowners in order to determine how you want to go about selling the property. If the neighborhood is being sold mostly to investors looking to keep properties occupied then consider selling with tenants. If, however, there is a lot of renovation going on around the area you might want to consider giving the tenants thirty days notice, doing some repairs, and selling a vacant home.
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