Selling a house with tenants

[mrsukyankee]

We are doing it right now. I'm sad because I was hoping our tenant would buy it but he couldn't raise the mortgage. Once we got the offer, we let him know, and then we gave a one month notice after we discovered that the buyer was definitely moving forward (different system here). Our tenant has been with us for over a year, so is on a month to month contract.

The hard part was that the guy did not clean up after himself too much and so the showings weren't great. But the people buying knew it was a rental so could overlook some of it.

He's not thrilled, but at least we gave him a shot and communicated as much as we could. I'm hoping he'll be out by the end of this month (his notice) or it'll get ugly and we could lose our buyer. We've given him a break on the rent this month to try to help him out (so he has something he can put as his security).

[picaflora]

We were able to line ours up with when our renters wanted out. I think I talked them into leaving a month early (forgave their last month's rent to help move things along). That gave us enough time to get it cleaned up/fix some smaller things before it went up on the market.

[majesty318]

I sold my rental house last year with tenants in it. Luckily, it sold very quickly. The realtor communicated directly with the tenants to get their OK for any showing times. They were kind of messy but everyone seemed understanding of that. When it sold I had to agree to a deep clean which was fine.

[sonrisa]

May 8, 2019 11:58:56 GMT -5 lucybrown said:

 Would it be out of line to offer them a break on rent to leave during showings?  

That sounds like a nice offer.

Do they have school age kids? Could you offer to have the closing (or at least the move out date) happen at least a week after the last day of school? I know that would go a long way to make me feel better about leaving earlier than I intended. (And we are approaching the end of the school year so it probably won't be hard to do).

[gummybear]

We are are literally doing this now - just heard back from inspection today from our sale of a rental. Our tenant had been there 4 years and also had been planning to buy and was month to month, but there really was no fire under his ass to move out. My husband had a conversation with him, letting him know we were planning on selling when he left and asked him what his timeline was. Turns out that that was the little push he needed and he asked for 8 weeks I think? So he moved out, we painted, did repairs and deep cleaned and put it on the market then. I think it was MUCH easier to sell without him there. I'd start the conversation, you might be surprised that they are willing to move their plans along.

[mrsukyankee]

We also had the realtor talk to directly to the tenant for scheduling purposes so that he wouldn't be totally put out when he needed to be home. I think it helped.

[kimmyo73]

We listed both of our rentals about 5 years ago.  Both were occupied at the time and ideally I would have loved if the tenants just purchased the homes but it didn't work out that way.  One tenant moved out with notice, that home sold for a cash offer to an investment group.  Had it been to an individual, we would have had quite a bit of refurb to do as it had been a rental with several turnovers.

The 2nd home also sold to an investment group and the renters stayed in the home.  We transferred their deposit at closing.  

Good luck.  I was dreading showings and what not but it wasn't bad in our situation.

[VillainV]

We have been the tenant in a similar situation. Obviously review the terms of your lease to make sure, but you should be well within your rights as landlord to let them know you intend to put the house on the market. If you can, give them as much notice as possible -- more than what's legally required. I would recommend paying for a whole-house cleaning before starting showings, and perhaps paying for weekly or fortnightly cleaning. You may also want to pay for weekly yard mowing (unless your lease already specifies that the tenant has to maintain the yard weekly). In most places you have to give the tenant 24 hours notice before showings, but you might consider trying to give them a little bit more notice, or potentially even schedule some open-houses for a few hours on a weekend day so they have plenty of notice. Finally, you might consider knocking a small amount off their rent ($100-$200) for the inconvenience.

Happy tenants will make this whole process much easier on you, so it behooves you to work with them, address their concerns, and make sure they aren't inconvenienced more than necessary. If they get to benefit from mowing/cleaning services and have plenty of notice for showings, they may be more willing to keep the place looking nicer. Unhappy tenants could make this process much more difficult for you if the place is a mess.

[pooh8402]

We ended up selling to our tenant, so it was a non-issue.

[artichokie]

We were the tenants in this situation.  Great house to live in, wouldn't want to buy it kinda situation.  Anyway, owners let us know so we could have the heads up.  Communication was between us (renters) owners in the beginning, then just through the realtor and us to let us know of upcoming showings.  We made it clean and show-friendly when they had showings, and left of course for the showings.     

[macmars45]

H and I were the tenants when the owner wanted to sell. We worked only with the property management company people. It was okay. My only complaints are people came early for showings especially on Saturday mornings, when the new owners came for the inspection they left a sweatshirt in my house for a week (I put it outside) and they delivered a box of stuff to the address two weeks before they took residence. I was trying to pack, clean and deal with buying my own house and they were all, can you just store this box for us? Uh, no. I put that outside too. I wasn't going to be their storage unit.

[calmcosmo]

A few things...

If they are month to month that goes both ways and they shouldn't get pissy if you sell. This is a business. If they want stability they need to sign a longer lease. Month to month is risk sharing on both of your parts. You should not feel guilty giving them notice.

Listing a house with a tenant in it can be complicated. Talk to a local realtor about going to your home and seeing how the tenant lives and whether the house shows well. You can give them financial incentive to keep the home clean and "show ready". I've known friends to give their tenants a $500 rebate when the house sells, or take $200/month off the rent while it is on the market. Something to make living in a for sale house "worth it" for them. Tenants are rarely motivated to get a home sold quickly and aren't going to make anywhere near the same effort as an owner would. 

If you think they'll be hostile because they don't want to move yet - don't list the house. It isn't worth it. Give them notice, let them move out, then list once it's empty. 

We sold one of our rentals in January. We waited until after the tenant was out, had the home deep cleaned, painted, and staged. It was just easier for us to have that control. Some buyers are turned off by rentals so by waiting until your tenant is out and you can make it look it's best you may actually come out with more money. 

[moonriver]

We were the tenants in this situation a few years ago. We still had 18 months left in our lease, but we figured it would be easier on everyone if we moved out as soon as we found a new place. They ended up paying us a large fee and we moved out within 2 months. We didn’t have to deal with showings, and they didn’t have to deal with listing a home with tenants.

[imojoebunny]

It really depends on the house and the neighborhood, and who the likely buyer is. We looked at listing a duplex we own in a "hot" mostly single family neighborhood, that is surrounded by mega multi-family (high rise, and mid rise apartments and condos). The realtor said it didn't matter in the least if we had tenants or not, since the house buyer is a gut renovation or an investor, looking for cash and hold, and either would be fine with having tenants for the time we had left on our leases, to either pull permits or plan renovations to raise rents (It isn't a dump, the neighborhood is just much become much nicer and a lot more expensive). We live in a landlord friendly state, and you do not, so having a month to month, is very attractive to a buyer, since they can have them move with more limited notice.

Having a tenant in a house you need to show, requires kindness, a break on rent or a pay per show, perhaps a housekeeper or agreement that they will have a certain amount of time to move out, if they wish. It doesn't need to be a blood bath of cash, but respect goes a long way.

[readyin07]

We haven’t sold, but our former tenants bought the house across the street from ours and were such pains in the ass about us showing it to prospective renters that I am not sure how we will handle selling.

[y4m]

We were the tenants in this situation and it was awful. The house was a weird layout and didn’t sell for well over two months with several showings a week. I work from home, we had a dog, and it was incredibly disruptive for us. The realtor had zero respect for me or my boundaries—to the point that we said a certain time wasn’t convenient because I was leading a conference call, and she just gave away the key box code and people barged in anyway.

Given my personal experience, I’d do whatever I could to not inflict this on a tenant. I’m still really bitter that they thought it was ok to simultaneously collect rent from us and use the property for their own purposes.

[moonriver]

May 8, 2019 19:49:11 GMT -5 y4m said:

We were the tenants in this situation and it was awful. The house was a weird layout and didn’t sell for well over two months with several showings a week. I work from home, we had a dog, and it was incredibly disruptive for us. The realtor had zero respect for me or my boundaries—to the point that we said a certain time wasn’t convenient because I was leading a conference call, and she just gave away the key box code and people barged in anyway.

Given my personal experience, I’d do whatever I could to not inflict this on a tenant. I’m still really bitter that they thought it was ok to simultaneously collect rent from us and use the property for their own purposes.

I’m sorry the realtor did that! We had to be really firm with our landlords realtor. We were out of town for a week and she wanted to let other buyers agents come show the house while we were gone. I understood this would be convenient since we wouldn’t have to worry about scheduling, but we were definitely not okay with random people coming and going as they pleased for a week.

[preppy]

We are selling a house right now with tenants - we close May 31. We contacted the tenants about 30 days before we planned on listing and paid for yard clean up and a professional cleaning the day it went live - they were more than happy to have this happen. We planned for the closing to be as close as we could to the end of their lease as possible. We were lucky that it was under contract in 24 hours so they dealt with 8 showings on day 1 and that was it. They were pretty easy about dealing with the inspections etc and then we had to do a few small repairs after inspection but overall they haven't pushed back too much. They were unsure if they would be moving out on time even though we provided a LOT (90 days) of notice but thankfully last week they signed a lease on a place for May 15 and we are giving them the 15 days until May 30 to remove their things. It has been mildly stressful and I am just hoping closing goes well!

We def priced well and a smidge lower than market to have it move quick and it did - this worked great for us and helped make it easier with tenants.

[preppy]

Oh and our realtor used an app for showing and inspection timing. The buyer realtor would request a time or showing and both us and the tenant had to approve it in order for it to happen. They only declined one that was able to be moved to a better time - it was a 8am request and the mid 20s guys in our house thought it was too early, ha.

[litskispeciality]

I think you've got great advice, just coming from someone who was month to month who had a landlord who wanted to show while I still lived there it was a pain. Understand that giving them notice can work in your favor that they might just move, but then backfire if you need the rent to make the mortgage payment. I think telling them before you list will make it better for you. We looked at a couple of houses that were tentant occupied. The landlord "didn't tell them" about the showings and the tentants wouldn't let us in to see it. We also worried that if they were bitter they'd cause damage to the house. All this to say having tenants leave on decent terms, at least 30 to 60 days notice could make your life easier when you're trying to get out of there for the buyer. Good luck!

P.S. just saw the showing app, I'm curious how those work, hopefully well.

[mrsukyankee]

lucybrown, no tenant is going to be happy about having to move and to show off the place they are being asked to leave. That's normal. And so I wouldn't worry about it. It is your house and you have tried to be as kind as possible. At this point, I'd give them a final date for their decision.

[calmcosmo]

May 8, 2019 22:19:23 GMT -5 moonriver said:

May 8, 2019 19:49:11 GMT -5 y4m said:

We were the tenants in this situation and it was awful. The house was a weird layout and didn’t sell for well over two months with several showings a week. I work from home, we had a dog, and it was incredibly disruptive for us. The realtor had zero respect for me or my boundaries—to the point that we said a certain time wasn’t convenient because I was leading a conference call, and she just gave away the key box code and people barged in anyway.

Given my personal experience, I’d do whatever I could to not inflict this on a tenant. I’m still really bitter that they thought it was ok to simultaneously collect rent from us and use the property for their own purposes.

I’m sorry the realtor did that! We had to be really firm with our landlords realtor. We were out of town for a week and she wanted to let other buyers agents come show the house while we were gone. I understood this would be convenient since we wouldn’t have to worry about scheduling, but we were definitely not okay with random people coming and going as they pleased for a week.

Moonriver, did the realtor comply? Every lease I’ve ever read has allowed for reasonable access to property within 24-48 hours. As a renter you don’t get to tell the seller they can’t enter for a whole week.

I honestly think that expecting an owner/seller to not show the property for an entire week because of a vacation is unreasonable. And not a lease protection I’ve ever seen. If they complied to your anxiety it was out of kindness. The lease likely would have allowed for showings while you were away.

You’re illustrating why selling work tenants is a headache for the landlord.

[moonriver]

May 12, 2019 11:06:32 GMT -5 lucybrown said:

May 8, 2019 22:19:23 GMT -5 moonriver said:

I’m sorry the realtor did that! We had to be really firm with our landlords realtor. We were out of town for a week and she wanted to let other buyers agents come show the house while we were gone. I understood this would be convenient since we wouldn’t have to worry about scheduling, but we were definitely not okay with random people coming and going as they pleased for a week.

As a tenant, this would make me uneasy too. But legally, they can come through for showings with the owner or licensed agent as long as notice is given (24 hrs in our state).

We were definitely lucky. They were ok waiting a week to put the house on the market. Had our landlord agreed to be at every showing we would have felt better about it, but that wasn’t their plan.

[litskispeciality]

OP, it sounds like you're doing everything you can to appease your tennants without waiting 2 years to sell. As other's have said they're going to be mad no matter what you do, just be prepared they probably won't move by the end of May, esp with a holiday. I've only moved that quickly once because of a job, when I was on a month to month lease, I think I gave notice right at the 30 day mark, but it was hell trying to work FT, plus look at other places (about 45 mins away) and pack. Then you have to hope the new place will take you, and has an opening June 1. If the tennants ask for a half month extension, or all the way through June they're not necessarily being difficult, they might just be looking as they can't end up homeless out of this.

I'm glad it sounds like your realtor is also willing to work around them.

[litskispeciality]

Good luck! I think July 31st is fair, almost more than fair, but from the tenant standpoint I get it. Hopefully buyers are happy knowing there's an end date with the current tenants and they could take over right after.