SELLING WITH A TENANT IN PLACE
At GL Realty, we've had multiple investors realize they needed to sell their investment before they had planned but were not sure if this could be done or how to get it done.
If you have a lease in place, the lease does not go away unless there is a mutual agreement to terminate the lease early. If this is an owner generated request, an owner may expect the tenant response to include a negotiation, including a monetary compensation for the tenant to end their lease early and relocate. The agreeable terms vary by seller, tenant time left on the lease, tenant lifestyle, and market inventory.
There can be perks to selling with a willing tenant in place. This can a great option if the tenant is on board and if your tenant would like to stay with a new owner. If your tenant is neat and has nice style, you may save on the cost of staging. If you have great tenants but their style is not market ready, we have a stager that will work with tenants.
How Do We Do This?
In communicating with the property managers at Good Life and their tenants over the past few years, GL Realty has created some best practices that have worked with our process for listing with a tenant in place.
- Include the tenant in the listing plan and ask for their input on showings. They need to live their life, work a career, or handle a family, so what will work with their schedule is critical in your home showing its best.
- Offer the tenant choices in showing times. Do they want notice prior to showing anytime or do they want to plan a window of time during the week and weekend for showings to be scheduled?
- Prevent the tenants from having their lives intruded on. Stay firm with your scheduled showing times, when possible.
- Do not put a lockbox on the property. Use a listing agent to host all showings. This allows the agent to make sure the tenants are being respected, reduces liability, and also allows the listing agent to highlight key features of the property.
- Don’t put signage in the yard alerting neighbors and the general public. This could be seen as an opportunity to knock on the door and request a showing.
- Educate your tenants; if someone shows up, they should never let them in. They should always refer back directly to the agent for safety and for best practices.
- Educate your tenants to reduce liability. Walk the property and discuss removing valuables, medicines and weapons from general access.
- Limit Open Houses (general public access) to tenant-occupied properties and always have more than one agent or lender on site for these Open Houses.
- Market the property only with new exterior photos. All interior photos should be from prior to the tenant move in, to protect their privacy and their personal items from being all over the internet.
- Provide immediate perks for open houses and inspections, such as gift cards, to use during the premiere open house. The seller should provide a general cleaning of the unit following the home inspections, appraisal, termite inspections, and showing walk throughs once in escrow and all inspections and repairs are complete.
These tips, along with our process for generating a summary of all work/repairs that should be disclosed by sellers, allow us to keep our sellers informed and the tenants respected for best results.