Ten Tips for Selling a Tenant Occupied House

by | BiggerPockets.com

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 tenant occupied house.  You may be thinking it’s not going to be a problem.  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 strangers 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 bought it. 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?

The one thing you don’t want is an angry tenant

Think about the damage they can do. Then 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 they are angry, they may remember things differently than you do.

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.

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10 Tips for Selling a Tenant Occupied House.

  1. Sit down and explain to them what the situation is; that the house is for sale and you would like their help.
  2. Assure the tenants that they are not going to be booted to the street with no warning and that they will have “X” amount of days after the contract is signed to move.
  3. Promise them that they that they will be notified prior to any showing of the home.
  4. Let the tenants know that they will also be notified prior to any home inspections, appraiser visits, etc.
  5. 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.
  6. Offer to give them a gift certificate of some kind to a store of their choice when the home closes.
  7. Ask what you could do to make this process easier for them.
    If the tenant is really stubborn, you may have to resort to one of the “big 3” below.

  8. Offer some type of bonus for leaving the home in top notch condition when they move out. For instance, you could offer them an additional $100.00 bonus in addition to the return of their security deposit.
  9. If moving expenses are the problem, offer to reimburse them for the cost of the moving truck. Help them move on.
  10. If the tenant is really stubborn, you may have to resort to the “cash for keys” plan. If the sale of your property hinges on getting  these folks out of the house this will certainly prove to be a lot easier and less costly than an eviction.

Get the tenants on your side!

While the last couple of suggestions may sound crazy, stop and consider this. Angry tenants can do a lot of damage to your property!

Time is money and 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.

Photo: Crosa

About Author

Sharon Vornholt

Sharon has been investing in real estate since 1998. She owned and operated a successful home inspection company for 17 years. In January of 2008 she took the leap of closing her business to become a full time real estate investor.


  1. Hello Sharon,

    Why does the tenant have to move out at all? I was thinking of selling my tenant-occupied home to a theoretical out-of-state investor who wants cashflow. Is that not also an option?

    • Hi Robert –

      It is an option if you can find an investor that wants the house (rather than a retail buyer) and this particular tenant. Some investors will be willing to give the tenant a try and others won’t. A lot of times, they don’t want to inherit a tenant that they didn’t choose. For instance, if the house is a mess or damaged in any way when they look at it, they may not want that tenant.

      A lot of the problems come up when you try to show the house. Some tenants will throw up all kind of road blocks to put off potential buyers. Each situation is different.

  2. I found what also works well is that you offer to have the lawns mowed and a house cleaner come in each week to keep the place looking clean. Of course, tact has to be used about the house cleaning so as not to upset them. But if the house is going to be on the market for a number of weeks tenants could see this as a bonus.

  3. Hello Sharon,
    I am short selling house that is tenant occupied. Closing is at the end of November and lease expires December 31st. New owner agreed to buy with tenants, but they will move out at lease expiratin date.
    To whom should I return security deposit check my tenants gave me , to my tenants or new owner?

  4. Hello Sharon,
    I am planning to sell my property, which is tenant occupied. The lease has expired in Dec 2012. However, a new lease hasn’t been signed till now due to going back and forth on some questions.
    My plan is to give them a month notice to vacate the home. Will there be any issues given the situation? The tenants have been nice so far, and we do not want to cause any issues or get them angry.

    Pal Hu

    • PalHu – Since they don’t have a lease, I don’t see a problem. They might need more like 60 days to find a new place and move in reality.

      I would just tell them that due to your current circumstances, you need to sell the property. Have you looked into the possibility that they may want to buy it?

      You could tell them you would like for them to be out in 30 days and see what happens. I would try to have an honest talk with them (in person) and try to work it out. Usually when they find out the property is going to be sold, they are OK with it and will go ahead and start looking for a new place.


  5. I am a tenant that lives in a home that was recently sold. My lease is being upheld by the new buyer. When the owner sold the home they said they paid the new owner the rent and now are demanding I reimburse them for them paying the rent for that month at closing. Is this normal and am I obligated to pay them back? They closed on the 3rd of them month vs the end of the previous month as they stated they would. I was not notified of the change until I contacted the investment firm that was to purchase the home since I needed to pay the rent to the new owner. I obliged the previous owners when they came last minute to say the home was being sold in a few weeks and when the investors had the inspector come thru. I was not compensated for my time and efforts when it came to this event. Any words would be most helpful.

  6. Sharon Vornholt


    Rent is paid in advance, so your landlord should have been paid at the beginning of the month for that month. If they didn’t close until the 3rd of the month, then your previous owner was owed 3 days rent by the new owner, not the whole month.

    What should have happened was:

    If you had already paid the rent for the upcoming month (the month that they closed on the 3rd) to the previous owner he owed all of that rent to the new owner (except the 3 days) at closing. The closing company (attorney or title company) should have handled all of this and you as the tenant should not have been involved.

    At any rate, you only have to pay rent for the month once.

    Who did you pay the rent to? Was it the previous owner in advance for the month of the closing or the new owner?


  7. Here’s a question from a tenant’s point of view. My landlord is selling the house in which I rent a suite. He’s a good guy and lives upstairs, so I’m happy to cooperate when prospective buyers want to see my suite. He’s always given me 24 hours notice and I keep the place spotless.

    Here’s the issue. It seems to be a courtesy that I not be there on site when the showings take place. I can’t find anything legal saying I actually have to temporarily vacate the premises until they’re done. Am I legally obliged to leave my home? I’ve left the past 6 or 7 times they’ve had a showing, but sometimes it isn’t always convenient. I work from home sometimes and I have a child. What if my child is sick during a showing?

    I am not saying no to entry. They can still enter and inspect the premises but we might want to be there. Do we *have* to vacate each and every time they want to show or is it only desirable to make prospective buyers more comfortable? What’s the protocol?

  8. Elle –

    You are not obligated to leave the property. I would tell your landlord that you work from home. Let him know that you won’t interfere, but you need to be there. Anyone looking at the property should be an investor and they will understand.


  9. Hi, Sharon. We want to sell our 5BR 3.5 Ba property in a military town that has been tenant occupied for the past six years. The current lease expires July 2016 and the tenants plant to move to their home state so there is no question of them wanting to re-new the lease. We have also told them we plan to sell the home with the goal that closing and their move-out will ideally be in the July time frame.
    We live across country and tried selling it as a FSBO ($525k) with a previous tenant family who were very nice, but frankly had small kids and the house didn’t always show well the one or two times there was interest in a showing. We did pay for house cleaning and gave them a gift certificate when they moved out. We ended up taking it off the market and renting it to avoid a gap in tenancy (the house is very desirable as a rental due to its large size, amenities and convenient and prestigious location). The issue is the home is in a price bracket that’s above the neighborhood average. It’s 13 yrs old and 3,800 sq ft whereas most homes in the neighborhood are 50-80+yrs old and avg about 2,400 sq ft.
    My guess is the fair market price is $480K(Zillow estimate is $507k) based on comps. We are ok with a sale price of $480K which is what we paid in 2004, as long as we don’t have to pay a commission. We have a large amount of equity built in which we want to use to purchase a vacation home. We have no interest in keeping the house or moving back. So here are my questions:
    1. Should we list the house as a FSBO at $480K or with an agent at a higher price (plus 6% commission)? I talked to a few neighbors who said they gave up selling as a FSBO and then had to raise the price when they went with an agent, but the house still didn’t sell. I’m pretty confident our home would sell at $480Ksince smaller (by 800-1000,sqft) and similarly appointed homes have sold this year for $440K.
    2. I’m thinking of offering $500 -$1000 bonus to my tenant for their troubles and to give them incentive to show the house in a nice condition IF we have a successful sale/closure on the house. The current tenants have been great and are very neat and tidy, so it’s really more of a motivator and compensation gesture. What do you think?

  10. You putting scare quotes around the phrase “their home” above is outrageous. When people rent, they are paying for that property to be their home: they raise their kids there, they live there, it IS THEIR HOME. And scrolling down to read someone “remind” everyone that “renters aren’t second-class citizens”. Twisted and pathetic. I have more forceful words but I’ll leave it at that.

    • I was just about to write the same thing. It IS the tenant’s home and it is pathetic this “pro” would think otherwise, but not surprising. When we were renting, we got a letter saying the house was being sold. A few days later, a realtor comes knocking on our door with lookers, then used her key and insisted on entering. My husband told her I wasn’t feeling well, but she said that’s ok and barged in. So they were wandering around my bedroom and looking in my closet while I’m lying there in bed. That was our home and it was a humiliating violation of my privacy. We were young and naive at the time, but we knew we wouldn’t allow that to happen again.

    • Sharon Vornholt

      The point I was making was exactly what you said; that it was their home while they were there. Your tenants should be respected during the process if you need to sell the property. No one ever hinted that renters were second class. Most everyone has been a renter at one time or another,

      The point of the article was just to point out to handle it in a way that was in the best interests of everyone. There was no disrespect intended.

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