If you ask different homeowners why they choose to sell their home, you’ll likely hear many different answers. Some may express they’re moving to be closer to family or their place of employment. For others, it may be time to downsize as their family situation has changed. Certain people may just need to make a major change in their lives.
Selling a home in California can be difficult at times. It may take a little longer than normal to sell your property depending on current market conditions. Selling a home that has existing tenants can further complicate the situation.
You are allowed to sell a home that has people still living in it. In most cases, tenants can live in the residence before and after the sale, according to the terms of their lease.
Having people occupy your house while you’re preparing it for sale can have its own distinct advantages and disadvantages. Having renters may appeal to certain buyers, however, it could also turn away other potential buyers.
Here are a few things that you can do if you’re planning on selling a home with tenants:
1. Talk to your renters.
One of the first things that you should do is inform your renters that you intend to sell your home. They may be willing to modify their terms of their lease and move out before the sale is complete.
You may have to offer a reduction in their rent or the length of their lease as incentives. If a tenant is unwilling to agree to negotiate and refuses to move, the new owner would be responsible for their lease.
In most cases, as long as you’re reasonable, honest and considerate of your tenants’ individual circumstances, they may understand your situation better and agree to modifying their terms.
Related: Selling a Home in San Mateo, CA
2. Plan open house showings around your tenants’ schedules.
It’s a good idea to schedule any open house showings around your tenants’ schedules. Talk to your realtor or listing agent and ask them to give you at least a day’s notice before any showings are scheduled.
This gives your tenants enough time to plan their schedules accordingly. You can make a special request to your tenants if you want to show your home earlier.
Open house visitors should be able to see all areas of the home when they visit, so they’ll need to be able to view and access the rooms that your renters occupy.
3. Make sure that all tenants are up to date with their rent payments
Having tenants who are behind in their rent can be a deterrent to home buyers. In certain cases, you may need to offer tenants more time to catch up. However, this is the exception to the rule.
If you have tenants who are consistently behind on their rent, putting your residence up for sale may be the right time to start the eviction process.
Try to resolve the situation in a timely manner so that it doesn’t distract parties who may be interested in your home.
4. Keep the property in good condition.
Your home should be in excellent condition before it is sold. Take the time to hire cleaners or a lawn and garden service if necessary. If there items that need repair or could be upgraded, now is the time to tackle those projects.
First impressions matter, so whatever you can do to improve the aesthetic appeal of your home can help you stand out in the minds of your open home visitors.
This isn’t your renters’ responsibility, it’s yours. If there are maintenance issues that they have brought to your attention, now is a good time to take care of those items.
5. Assist tenants in finding new homes if required.
In some cases, it may be beneficial to assist your tenants in finding a new place to live. Take the time to sit down with them before putting your home on the market.
Listen to their concerns, and see if there are ways that you can help them. Working with them may find ways for them to find a new residence before you expect to sell your home.
Homes with tenants are sometimes seen as investment properties. They can be a good source of additional income for single people and working families.
They are a lot of extra work. Sometimes that work isn’t worth the risk. A lot of it depends on the neighborhood, the condition of the home and the tenants. No matter how many good tenants you have, there are bound to be a few that can make being a landlord rather stressful and miserable.
Keep your expectations realistic, and don’t be afraid to enforce the rules when you have to. There may be unruly tenants who object to your sale or insist on sticking to the terms of their original lease after you’ve offered concessions or modifications.
Don’t be afraid to evict them as long as you have just cause to do so. Know your rights, and consult a real estate attorney if you have any questions or concerns regarding your legal rights as a landlord. Selling a home is stressful enough without having uncooperative renters adding to that stress.
Selling a home with tenants can be done, but it usually requires extra work and possibly a little more patience. Be considerate to your renters, especially if they have lived at your home for a few years or more.
Their finances and personal situations may make it increasingly difficult to move out before or after the property is sold. Talk to your realtor and any interested buyers so that they fully understand the situation. Both parties have legal rights that have to be taken into account.
Handling the matters in a fair and open manner can ensure that the ownership transition goes smoothly. What happens to the tenants will soon become the new homeowner’s responsibility.
📞 Have Questions? Ask The Chris Eckert Real Estate Team
Give The Chris Eckert Real Estate Team a call today at 650.627.3799 to learn more about local areas, discuss selling a house, or tour available homes for sale.