5 Tips for Selling a Tenant Occupied Home

September 28, 2010 in Investing In Real Estate, Landlords and Tenants

 

Whether you are a seasoned landlord that has seen it all or a landlord that has one house and a great tenant, there will probably come a time when you want to sell a rental house that is still occupied by a tenant.  You may be thinking “So? It’s my house and I’ll sell it if I want to!”  Selling any home in this market can be a challenge but selling one with a tenant can completely exasperate you.

Look at it from the tenant’s point of view.  They live there right now and chances are they don’t want to move.  From their point of view, you are asking them to inconvenience themselves by allowing unknown people to traipse through “their home” at all hours of the day and possibly the evening.  When you sell the house, they will have to move if a retail buyer has purchased the house.  They may still have to move if an investor buys the house and wants to make changes.  Why should they make it easy for you?

Think about the damage they can do.  Think about what they could tell a potential buyer if given half a chance! They have actually lived there for a period of time and they should be familiar with the home, how it is maintained, any problems the home might have and the quality of the neighborhood in general.  If you want to have a chance of selling that house, you need a plan.  You need to try and get the tenant on YOUR side so that you can sell the house quickly. 

Consider some of the following tips to make your life easier in the long run:

1.  Sit down and explain to them what the situation is; that the house is for sale and you would like their help. If you are trying 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.

2.  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.

3.  Let the tenants know that they will be notified prior to any showing of the home, home inspections, appraiser visits etc. They will be more understanding if they believe they are part of the process.

4.  Offer to compensate the tenant for every time they allow someone to view the home.  You will have to decide on an amount, but consider paying them $10 every time the home is shown payable once the house closes.

5.  Offer to give them a gift certificate of some kind to a store of their choice when the home closes just for their trouble during this whole process.

While the last two suggestions may sound crazy, stop and consider this.  Time is money.  The faster you get the house under contract and sold, the sooner you can move on.  Your job is to get the tenant to help you sell the home.