How to Sell a Home With Renters In it
During the economic downturn, many people had to move for various reasons but couldn’t sell their homes. So they became “accidental landlords”—forced to rent out their homes. As home values increase, however, the option to sell becomes a reality again. Only now, they’re trying to sell a tenant-occupied home. Here’s how to sell a home with renters in it.
Wait for the lease to expire
Tenants can be a wild card in the high-stakes real estate game, so some agents feel it’s best to wait until after the tenant leaves. After that, make some cosmetic fixes to clean up the home and sell it vacant.
Waiting may be especially important if you have a difficult tenant or one who is unhappy that their home is “being sold out from under them.” You certainly don’t want them making it difficult to show your home, and a disgruntled renter could easily do that by mucking up paint or leaving the place a mess. The result is that your property looks less appealing to potential buyers, which can have a dramatic effect on your bottom line.
On the other hand, selling a vacant rental unit isn’t always ideal for a landlord’s finances. It can take months from the time the home goes on the market until it’s sold. During those months, you’re receiving no rent. This can be especially trying if your home has been a long-term financial burden.
Sell while the renter is still there
If you have a good relationship with your renters, it can be beneficial to keep them in your home during the marketing and sales process. Homes show better with furniture, giving buyers a better feeling for what it is like to live there.
Most tenants, upon hearing that the landlord would like to sell, immediately start looking for a new home. They’d rather move on and not deal with keeping their home clean all the time for showings.
If your home is in a desirable neighborhood, you plan to price it right, and you think it may sell quickly, use the tenant to your advantage. Lower their rent for a month or two prior to the showing and provide them with an incentive to stay a little longer.
If they agree to cooperate, guarantee them enough time to find another place and move. And if they’re helping you to get the home sold quickly, offer to help pay their moving costs.
Pay attention to how you deliver the message
Ultimately, the success of dealing with a renter during a sale is less about the message itself, but in how the message—that you’re planning to sell the place—is delivered.
Think about who your tenant is and what their situation is, then try to deliver the message as thoughtfully as possible. If you have difficult renters and suspect they won’t be cooperative, simply let the lease run out. Or find a way to legally take the home back and sell it vacant. But if you have a good relationship with your renters, try to work with them. No tenant wants to be surprised with little (or no) notice that they must vacate.