Selling a House with Tenants: Incentives or Eviction?
Let's face it, tenants are a pain when you're selling a property. They have the right of possession, which means that they don't have to let agents and buyers in if they don't want to. Recently, I had some tenants that started out quite nice. They signed a lockbox addendum, stating that a sign could go up in the yard and that they would allow a lockbox, so that I could show the property when they weren't around. Then they promptly put a deadbolt on the door without telling anyone, so that I couldn't show it while they were out of town to the one agent who called to see the place. In the present market, this is the kiss of death.
When there was almost no inventory, I saw tenant-occupied properties selling sight unseen for over-asking price. Buyers were making offers "subject to inspection." This statement generally makes an offer meaningless because the whole thing can collapse once the seller meets them at the door to usher them into the squalid mess that the angry tenants have created. But I saw escrows open and close successfully in this way a few years ago, sometimes without the property becoming "active" on the MLS, just going straight from "hold" to "pending" and then "sold."
Not anymore. And this is a tough call. Can the seller afford to have a property sit empty for 6 months or more while waiting for a buyer to make an offer? On the other hand, if the tenants are truly unreasonable, do you even want to keep them around?
The best situation all around would be sane tenants and landlords. If the tenants are sane, treat them with respect, tell them that you would appreciate it if they let people see the place during reasonable hours. You can also try to get them on your side by offering them an incentive: for every agent card that they give the listing agent (who can then call the other agent for feedback and verification of a visit), the tenants could receive $50 at close of escrow.
Best to do your math ahead of time and figure out the most cost effective way to deal with the situation. You may just want to give them a 60-day notice before you list the property. If they clear out early, you'll have time to get the place cleaned up and then can get it on the market early.
When there was almost no inventory, I saw tenant-occupied properties selling sight unseen for over-asking price. Buyers were making offers "subject to inspection." This statement generally makes an offer meaningless because the whole thing can collapse once the seller meets them at the door to usher them into the squalid mess that the angry tenants have created. But I saw escrows open and close successfully in this way a few years ago, sometimes without the property becoming "active" on the MLS, just going straight from "hold" to "pending" and then "sold."
Not anymore. And this is a tough call. Can the seller afford to have a property sit empty for 6 months or more while waiting for a buyer to make an offer? On the other hand, if the tenants are truly unreasonable, do you even want to keep them around?
The best situation all around would be sane tenants and landlords. If the tenants are sane, treat them with respect, tell them that you would appreciate it if they let people see the place during reasonable hours. You can also try to get them on your side by offering them an incentive: for every agent card that they give the listing agent (who can then call the other agent for feedback and verification of a visit), the tenants could receive $50 at close of escrow.
Best to do your math ahead of time and figure out the most cost effective way to deal with the situation. You may just want to give them a 60-day notice before you list the property. If they clear out early, you'll have time to get the place cleaned up and then can get it on the market early.
posted by Alma Jill Dizon, Riverside Realtor @ 10:18 PM
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