Updated over 3 years ago on . Most recent reply
Thinking of Selling.
Should I let my property manager know, I want to sell property?
Most Popular Reply
Richard F.
#1 Tenant Screening Contributor
#1 Tenant Screening Contributor
- Honolulu, HI
Aloha,
If you want a smooth transition, you really need to let the PM know well in advance. You will need to deal with tenant deposits, outstanding invoices, possibly tax and insurance pro-rations, rent pro-ration, transfer of utilities and any service contracts, etc. That's not going to happen if you walk into their office and tell them your closing on a sale tomorrow.
Once you reach a point where your financing is locked in and contingencies cleared, you should request the PM to send a letter of introduction for the new Owner/PM to any occupied units so they are not taken by surprise when someone new comes knocking on their door. Also for occupied units you would want your current PM to provide estoppel certificates from each unit, and copies of current rental agreement and any addendum or addenda.
Also, there needs to be consideration of the tenants. What is the term remaining for their current agreement? Personally, I always advise our Clients to get the property vacant first, before listing it for sale (Obviously, not a multi-family property, but detached homes or duplexes, condos, etc.). You lose a big share of the potential Buyer market by trying to sell while occupied, and make it more difficult for those that ARE interested to be able to view it due to coordinating with occupants.
If you want a smooth transition, you really need to let the PM know well in advance. You will need to deal with tenant deposits, outstanding invoices, possibly tax and insurance pro-rations, rent pro-ration, transfer of utilities and any service contracts, etc. That's not going to happen if you walk into their office and tell them your closing on a sale tomorrow.
Once you reach a point where your financing is locked in and contingencies cleared, you should request the PM to send a letter of introduction for the new Owner/PM to any occupied units so they are not taken by surprise when someone new comes knocking on their door. Also for occupied units you would want your current PM to provide estoppel certificates from each unit, and copies of current rental agreement and any addendum or addenda.
Also, there needs to be consideration of the tenants. What is the term remaining for their current agreement? Personally, I always advise our Clients to get the property vacant first, before listing it for sale (Obviously, not a multi-family property, but detached homes or duplexes, condos, etc.). You lose a big share of the potential Buyer market by trying to sell while occupied, and make it more difficult for those that ARE interested to be able to view it due to coordinating with occupants.