Whether you have a large portfolio of properties or just a handful of rentals, there will almost certainly come a time when you decide to sell one of your properties that is occupied. Today I have some tips on selling a tenant-occupied home.
You may be thinking that this will be an easy process, but I have to tell you that without the proper preparation this process may turn into one giant headache. If you have been a landlord for any length of time you know that some tenants can be completely exasperating. If this process is not handled properly, tenants can actually prevent the sale of your property by throwing up roadblocks.
The Seller's Point of View
If you look at it from the tenant’s point of view, not only is selling the property they currently call their home an inconvenience to them, but they will likely have to move. You will also be asking them to keep the house straight and let strangers come into their homes while they are still living there.
Why should they make it easy for you?
Get the Seller on Your Side from the Beginning
Think about the potential problems they can cause if you can’t get them on board with your plan to sell the property.
These folks have lived in your home for a period of time. They will be familiar with the home, how it is maintained, any problems the home might have and the quality of the neighborhood in general. It's is information they will be happy to share with your prospective buyer. This is why it’s so important to enlist the cooperation of the tenant.
Making the Process Easier
Here are 8 tips to help make the process of selling a tenant-occupied home a little bit easier.
- Explain to the tenants that you need to sell the house and you would like their help. If your plan is to sell to another landlord and there is a chance they may be able to stay in the home, be sure to convey this information to them. However, if you think you will be selling the property to a retail buyer be upfront with them so they have time to plan to move.
- Assure the tenants that they are not going to be booted to the street with no warning. Tell them that they will have “X” amount of days after the contract is signed to move. Be sure to write enough days in the contract to be fair to your tenants.
- If you have another property that becomes available, offer to let them move to the new location.
- When they have been helpful during this process, maybe you can pay for a rental truck that they can use to move. It’s a small price to pay for their help.
- Offer to let them out of their lease with no penalties if they want to go ahead and find a new place. It’s the right thing to do.
- Be sure the tenants understand that they will be notified prior to any appointments to show the home, for any inspections, appraiser visits, etc. If they feel like they have a say in this process they will be more cooperative.
- Showing a tenant-occupied home is an inconvenience to the family living there. Offer to compensate them each time they allow someone to view the home. You will have to decide on an amount, but consider paying them $10-$20 every time the home is shown (payable once the house closes).
- Once the house is sold, offer to give them a gift certificate to the store of their choice when the home closes just for the inconvenience they experienced during this whole process. Don’t “cheap out” on this gift. If they made it easier for you to sell the property reward them for their help.
If you’re thinking about skipping the last two suggestions, stop and consider this; time is money. The faster you get the house sold, the sooner you can move on. Your job is to get the tenant to help you sell the home.
What strategies have you used when selling a tenant occupied home?
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