Selling a home that is tenant occupied can be a test of ones patience. The litmus test has to do with why the tenant is leaving. Or has the sellers financial situation put the tenant in a situation that they have been ask to leave?

Dirty dishes do not leave a good impression

I have been fortunate to work with some good tenant’s. However in most of these instances the tenants have provided the landlord with a notice they intend to leave. They may have decided to buy a home of their own or they may have found another unit to lease. In either case, when tenants leave under their own volition, they usually have no desire to become vindictive, nor do they want to impair the landlords ability to either relet or sell the property.

Most of the issues occur when the property owner decides it’s time to sell for financial gain or other financial considerations. If a tenant feels they have been treated unfairly, the selling process can become complicated.

The main issue has to do with the “showing” of the property. A hostile tenant may demand a 24 to 48 hour showing notice and have last weeks dirty dinner dishes in the sink. They may remain in the house during a viewing almost to the point of hovering and implying an intimidating presence to the prospective buyer.

The Tenant as Salesperson?

Some tenants will also take it upon themselves to become “Real Estate Agent of the Day” and provide the buyer and their agent with “Full Disclosure” regarding the condition of the house. Which by the way is beyond their scope of responsibility. Also, when a tenant makes a statement about the condition of the property, is it opinion or has it been investigated by a licensed professional who performed an investigation and rendered an analysis?

Suggestions for the Landlord

It has not been uncommon for rental or income properties to be sold “subject to inspection”. This means that you as a buyer must submit your offer on the property sight unseen, at least as far as the interior is concerned. In a slower market this is a great way to allow your property languish on the market. Prospective buyers want to see the condition of the property. They need to see what they are buying.

If you find yourself in the position of needing or wanting to sell your tenant occupied property, my recommendation would be to alert the tenant(s) to your intentions. I see many listings that state “no sign on property, tenants are unaware of the sale”. My opinion is people deal and process facts much better if they know the situation up front. This is the same with disclosing the property’s condition, its better to disclose up front all of the material facts. I believe most buyers can accept it, maybe negotiate the repair and move forward. If they find out on their own, red flags go up and they immediately begin to wonder what else they will they find and think you took advantage of them.

Get an agreement with the tenants on when the property can be viewed and the condition it will be in. Financial incentives also work well. The little bit you are likely to give up will pay long term benefits.