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How to Sell a Property that is Occupied by Tenants

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By : Shamon Kureshi    99 or more times read
The housing slump of the past few years has lent itself to the invention of the Accidental Landlord. Loosely defined, an Accidental Landlord is somebody who has attempted to sell a property at a price that the market deemed as being unrealistic, and as a defensive maneuver, has elected to rent out. The good news of course is that the trend of house prices spiraling downward seems to be at its end. Accidental Landlords are nearing the end of their accidental occupation and that new lease on life that renting provided is growing increasing less necessary.

The problem for Accidental Landlords now becomes that of how to sell a property that is tenant occupied. The remainder of this article will provide some insights and tips we have learned through our Calgary Property Management Company.

The first, and clearly the most important tip, relates to establishing a positive, truthful relationship with your tenant. It has been our experience that most tenants will feel marginalized if faced with real estate agent advising them that their home is about to be put on the block. As a landlord, be sure to discuss such intentions with the tenant prior to any actual listing contracts being signed, or any marketing of the home beginning. Offering the tenant the opportunity to purchase the house, at a discounted price in lieu of realtor fees, is a smart move that will inform the tenant of your plans and provide a respectful and tasteful solution to what can often be a problematic situation.

I have seen tenants grow increasingly upset over realtors and landlords storming through the home to show it to prospective buyers, and in the process completely upsetting the day-to-day equilibrium of the tenant’s lives. In certain cases, the tenants will repay these frustrating acts with messy homes or by providing negative details to the prospective buyers who may take everything the tenant says as serious and truthful, whether or not the information is truthful.

The next tip is to check with your local legislation and see what sort of notice period is required to be sent to the tenant prior to a landlord or realtors entry of the home. In most provinces or states, this time period is about 24 hours. If you stick to this amount of time the tenant will notice and likely show some favorable response to your mature and respectful gesture.

Finally, and perhaps most obviously, be sure to review the residential tenancy agreement and observe the lease dates prior to listing the home for sale. In most cases, if a lease exists and your tenants are not willing to leave early, you will have no way of getting vacant possession on closing for your buyer. Less than a year ago, I came across a situation exemplifying this tip; the landlord had no idea that the tenants had no intention of leaving early, and the buyer had no intention of taking the tenants. This proved to be a very expensive lesson for the landlord because, after accepting an offer for the purchase of the home, the contract had to be reversed and the buyer’s money refunded.

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