How To Sell A House That Has Tenants

Getting your home in selling condition is challenging enough as it is - and with existing renters involved, you’ve got a lot to deal! The last thing you want is unhelpful (or unhappy) tenants getting in the way of closing the deal with potential buyers. Having a good plan and being transparent with everyone involved are crucial components to this situational selling process.

While many home sellers wait until their tenants lease runs out, others simply can’t afford to have their house vacant for a few months during the transition. If you’re looking to sell your house fast but aren’t sure how to handle the renters that currently live there, here’s a look at your options.

Review The Rules

First, brush up on your state’s tenant-landlord rules to understand what you can and can’t do when it comes to selling a tenant-occupied house. At this point you may want to consult or hire a licensed agent who has experience with renter-occupied home sales.

As the property owner, you have the right to sell whenever you want but you must still honor the lease you signed with the renters. Not only is it possible to begin the process of selling your house while occupied, it’s fairly common to include the renters as part of the bargain. Depending on who you sell to, you may be able to pass the lease agreement to the new buyers, allowing them to continue living there with their new landlords.

Decide Whether Or Not To Wait

Obviously you must consider the advantages and disadvantages of selling a tenant-inhabited property. Will that curtail appeal to buyers?

Based on the belief that, yes, occupied homes are less attractive to prospective buyers - most professionals will advise waiting for the lease to run out before putting the house on the market.

Waiting may a definitive option if you’re dealing with a troublesome tenant, for example, someone who won’t be happy learning their home is being sold out from under them. The last thing you want is an angry tenant sabotaging your staged open house!

But selling a vacant house may not be ideal for your financial situation. It can take months between listing and actually selling it. If you’re not receiving any rent during this period and the home is already a financial burden, you’re going to have to work with the existing tenants in some amicable way. So if you can’t play the waiting game, you’re going to have to sit them down and explain the situation.

Create Win-Win Situations

Here’s an undesirable scenario: Your renters find an ad in the paper of their home for sale. Of course they’ll get upset if this is how they find out it’s time to look for a new place! Don’t go behind their backs. Sit down and discuss your decision to sell before you start selling.

Believe it or not, happy, informed tenants can actually become your allies. Although most tenants will start shopping for a new place once you break the news, you might present them with alternatives from which you can both benefit. If your home is in a hot market and you’re confident about selling quickly - you can use renters to your financial advantage. Offer them reduced rent and work with their schedule (and their furniture!) to stage the home for open house. Make sure to compensate them for their cooperation. Propose helping pay their moving costs in exchange for their cleaning up and staying away during scheduled showings.

Kick Them Out

The message is simple and you’re the messenger. Unfortunately, there are a lot of unreasonable people out there! If your tenants are are unwilling to negotiate with your terms and you decide it’s necessary to evict them, hire a qualified lawyer to handle the process.Bear in mind that the cost of an eviction can be extremely expensive depending on the circumstances in your specific situation. Pursuing legal action to evict a tenant should be your final option, especially considering the thousands of dollars it could cost you to do so. Also, beware that laws tend to favor the renters over the landlords. A long term battle likely lies ahead.

Sell Your House

If you don’t want to evict them, get familiar with your options. The Cash for Keys method allows you to offer them money to get out. You may also consider alternative buyers for your home. Get a quote from professional investors that pay cash for tenant occupied homes in your area. This can be an excellent option if your goal is to sell quickly.

Generally, listing and marketing your house for sale is easier without tenants. Otherwise, it’s important to keep your tenants happy and have them on your side. Respect their rights before you decide to fight for yours. And remember, you have a lot of options when it comes to your home sale.