Selling with Renters

Are you a landlord looking to sell your property but there are still tenants occupying the home? The good news is selling your home with tenants is possible.

Some states have specific laws and regulations homeowner need to follow when selling a residential property with tenants, but much of the imposition is on the homebuyer, who will be required to honor the existing lease agreement. But don’t fret -- with the right approach, communication and adherence to legal requirements, it is entirely feasible to sell your property while respecting the rights and needs of your tenants.

What’s more, there’s no one solution to selling a house with renters in it. The specific course of action will depend on a number of factors, such as the type of rental agreement and if the renters are willing to accept an early move out arrangement or continue their lease during the sales process.

Steps to Take Based on Rental Agreement

The path to selling a house with renters in it begins with a comprehensive understanding of the rental agreement in place. The course of action you should take will largely depend on the terms and conditions outlined in your rental agreement.

Month-to-Month Lease

If your tenants are on a month-to-month lease, either party can terminate the lease with proper notice. In many states, landlords are typically required to provide tenants with a 30 to 60-day notice to move out. In this situation, as a landlord planning to sell your property, you'll need to give your tenants a 60-day notice to vacate. This notice should inform them of your intention to sell the property and may include specific terms for showing the property to prospective buyers during this time.

Fixed Lease

A fixed lease, often spanning six months or a year, presents different considerations. Here, your options are to sell the home to the tenant if they're interested in purchasing it or to sell to an investor willing to assume the lease. In the latter case, the lease terms, including the lease end date and rental rates, would typically continue.

Tenant Refuses to Move

What if a tenant with a fixed lease that has not yet expired refuses to move? This scenario can pose a challenge if the buyer wants to reside in the home, but there are potential solutions. You might consider offering a financial incentive for the tenant to vacate the property, such as helping with moving costs or returning a portion of their security deposit. Alternatively, you can choose to wait until the lease naturally expires before proceeding with the sale of the property.

Pros and Cons of Selling a House with Renters in It

Selling a house with tenants offers both advantages and disadvantages. Understanding these can help you make an informed decision about the best course of action.

Benefits

• The Property Is Already Staged: One significant advantage is that the home is already staged. Staged homes tend to be more appealing to potential buyers. According to the National Association of Realtors (NAR), 82 percent of buyers' agents believe that staging makes it easier for buyers to visualize a home as their own.
• Can Be Attractive to Real Estate Investors: If you opt to sell to another investor, your property may be more appealing to them if they don't need to line up new renters. They can begin generating rental income immediately.
• No Loss of Income: You won't lose rental income during the sales process. By showing the home while tenants are still paying rent, you can keep generating income until you sell the property.

Disadvantages

• Tenants Can Interfere with Showings: Tenants who are uncooperative or unwilling to leave the property during showings can make the sale process challenging. This includes situations where tenants keep the home untidy, making it hard to present it in its best light.
• There Can Be Legal and Financial Risks: Tenants who owe back rent or refuse to vacate can pose legal and financial risks. Evicting a non-compliant tenant can lead to lengthy court proceedings, which may disrupt the sale. If these issues cannot be resolved in time, they can create significant issues.

Sell Your Home with the Help of 72SOLD

At 72SOLD, we’re in the market to sell your home, whether it’s being rented or not. Every home we help to sell comes with unique features we recognize and highlight to find the right buyer not within weeks or months, but in as little as eight days.

If you’re looking to sell your home quickly for an above average price, be sure to get in touch with us today.