How to Sell a House with Existing Tenants

Do you want to sell a rental property but you currently have tenants living there? Most landlords want to strike a balance between being respectful to the current tenants and also make the transaction as simple as possible for the new buyer. 

The bottom line is that selling a house with existing tenants is challenging when going the traditional way of listing it with a Realtor.

We will discuss the details of what is involved in the remainder of this article if you decide to that route. However, we are aware that many readers in Jacksonville may not have the time, energy, patience, or financial ability to sell a tenant-occupied home the traditional way.

In light of this, there is an easier and faster way to sell your rental home with tenants while bypassing the conventional process. We will first discuss the benefits below.

Best Alternative: Sell Your Tenant Occupied Home Through Freedom Home Buyers

Let’s face it, selling a house with tenants living there is stressful when you do it the conventional way. 

Reduce the stress associated with selling a tenant occupied property by selling it to Freedom Home Buyers. 

Here are some of the benefits of selling your house to us and skipping the open market.

No Showings or Notice Requirements

We buy houses fast in Jacksonville Florida without listing them on the MLS, or scheduling multiple showings. We can sometimes make an offer sight unseen, and at most require just 1 brief showing. 

We don’t bring in home inspectors after making you an offer, and you don’t have to schedule county inspectors for permit approvals on repair items, contractors, or anyone else.

No Real Estate Agent Fees

You won’t need to sell your rented property through a real estate agent when you sell to us, so you won’t need to pay for the real estate agent’s fees or commission. We are the buyer, and we pay you directly.

Cash Home Buyer / Quick Sale

We are a cash home buyer that eliminates the need to go through a mortgage company or escrow, saving you both time and money. This means a quick sale, minimizing the stress and strain placed on your existing tenants.

Since we pay cash, it reduces the length of time it takes to sell your property. We will complete the sale quickly and simply, whether you have tenants on the property or not. 

If you do have tenants on the property, we will act as the property manager until the tenancy agreement expires. 

Sell As-Is

You won’t have to stage your property or host an open house when you sell through us. We will buy your house as-is in its current condition, even if it needs significant repairs. This means you don’t have to fix up open repair items before selling your rental house. How bad is too bad? There are cases where we even buy condemned properties, houses with fire damage, and even homes with water damage. In other words, no repairs are going to scare us away.

Still not convinced? 

Contact Freedom Home Buyers to learn more about how we can take your rental property off of your hands quickly and easily. 

Ok, now we will get into the issues other home sellers face when they call a real estate agent to sell their tenant-occupied home on the MLS.

Traditional (Old) Way of How to Sell a House with Existing Tenants

Many landlords wonder if listing their rental property for sale will disrupt their tenants during the sales process, resulting in their leaving prior to the sale. The short answer is yes, and the concern really comes down to money. Because a vacant rental property often has a mortgage on it, scaring away your teants is a big deal. Without rent coming it, it can be expensive to wait for the house to sell. This means 2 mortgages (or more) for the average person.

Short of a special clause, your existing tenants’ lease remains in place and in force until expiration even when the home changes hands. This means your existing tenants are required to remain at the property during the sales process by law. Once you find the right conventional buyer, the new owners can work with the tenants regarding their future at the property beyond the existing lease. Again, this assumes the tenant doesn’t decide to feel justified in breaking their lease.

We know that landlords who consider selling their property with tenants still living there have some questions. Should you notify them? Should you keep the sale “hush-hush?” Let’s discuss some of the details and best practices so you can make the most of this process.

There are special considerations when selling a house with tenants currently living in it. Use these tips to ensure that you get the best results when selling your rental house. 

Communicate With Your Tenants

Tenant rights vary by state, and you may not be required by law to disclosed your intention of selling the property they are living in. However, being direct and transparent is still the best policy. The main reason for this is the increased activity and showings that will affect them.

Your tenants are going to find out the house is for sale, so it’s a good idea to discuss your plans to sell the rental house before it’s official. Even if they are in a fixed lease term, being caught off-guard can raise concerns about their living situation and cause them to look for a new place to live.

Give the tenants plenty of notice about sale, and also the activity that will take place around them. During the sale of the rental property, potential buyers and inspectors will need to access the home, and you may need to make repairs first to ready it for sale. That is, if you don’t go with a cash buyer or real estate investor who accepts your home in its current condition.

The tenants may also need to prepare for new living accommodations if their lease is expiring. While the new owners of the property must honor the fixed-term lease agreement, they don’t have any further responsibility beyond the term. 

Clarify Expectations for Showings

You will need to show the property with tenants still living on the premises, and probably 10-25 times in a hot market! This is another reason why informed sellers opt to simply sell to a cash home buyer who can close in days.

Clarify your expectations of the tenants regarding the condition of their living space when you have showings. The biggest challenge is ensuring they clean up their living space and organize their belongings prior to showings. However, you can’t require this by law. (Which is a challenge!) If your tenant is a hoarder, this calls for special considerations in the sale. Read this post where we cover selling a hoarder house in detail.

You can’t expect the tenant to completely stage the space for you, but you can ask them to keep it relatively clean. 

They should also keep pets and children under control if people come around when the children and pets are on the premises. You don’t want to be responsible for a lost pet due to the buyer’s agent leaving the door ajar after a showing. In fact, pets should be removed during showings.

A clean home with cooperative tenants is perhaps the biggest challenge and roadblock to selling a house with existing tenants.

Schedule Showings Around Tenant’s Schedule, if Possible

It’s only fair to give your tenant ample notice about showings and to schedule those showings around the tenant’s personal schedule. However, this is often difficult because buyers wish to come when it’s convenient for them.

You don’t want the tenant present in most cases, even a cooperative tenant, so you can try to schedule appointments while they are at work. Just verify that they feel comfortable with you showing the place during that time. 

Once again, you should give your tenant ample notice before showing the rental home. If you provide short notice, the tenant may not have time to clean up in a way that best showcases the property. 

Also, most leases and state tenant rights require a notice period such as 24 hours. A tenant may refuse entry if non-emergency short notice is given, making showings even more difficult.

Help Tenants Find New Place To Live

If you do know that that tenant will need a new place to live prior to the sale being finalized, you can help them by helping them find a new place to live. Do you have another rental property that has an upcoming vacancy? You can suggest a lateral move.

Some real estate investors want to buy a rental house with existing tenants, but other conventional buyers may wish to live there personally. It’s easier to sell a place without the tenants living there in this case. A vacant possession immediately after the sale may help you sell the rental house faster.

Show the tenants any other properties in the area that you plan to keep that may accommodate your current tenant’s needs. Not only will this make it easy for them since they won’t have to search for a new rental property, but you’ll also get to keep the rental income from those tenants without any gap.

If you don’t have another property with empty space, you can also write them a great recommendation for their new landlord. Write the reference on official letterhead and be honest, while emphasizing the best parts of leasing to the tenants. 

While it can sometimes benefit you to keep the tenants in the property to receive rent during those months while the home is on the market, you may wish to assist the tenants in finding a new place to live before you start the house selling process.

Note: Listing the home for sale with a real estate agent will bring a large number of disruptions to existing tenants. Consider removing this problematic feature of a traditional sale, and sell your house to an experienced buyer like Freedom instead. 

We won’t need multiple showings or inspections and can close fast. If you do choose to go the traditional market listing route, consider these tips below to minimize the impact on your tenants. 

Examine the Property Prior to Listing

You should examine the property to understand its condition before you sell it. The condition of your real estate will impact how you move forward with the sale. As with most rental houses, you may not be fully aware of its condition and if any deferred maintenance is present. 

Start by talking to your tenants about any problems they’ve noticed during their stay. Many tenants won’t bother a landlord for small issues, but you’ll want to know about them before you sell the place. 

You should also schedule a time to examine the property yourself. You may want to make some repairs or spruce things up before you start the sale of your rental home. If you don’t want to make repairs, you’ll at least have an accurate description of the condition for potential buyers. 

What Are Your Responsibilities Toward Your Tenant as a Property Owner?

Whether your existing tenant is a good tenant or if you’re dealing with a bad tenant, they do have certain tenant’s rights. 

The specifics of your responsibilities as a landlord vary greatly from one place to another, but certain laws apply throughout the country. 

Honor the Rental Agreement

When you rent out real estate, you and the tenant sign a tenancy lease agreement that clarifies the responsibilities of both parties in the agreement. It will also include the lease term that indicates how long you, or the new owner, must honor the tenant’s lease.

When selling rental property, your prospective buyer must honor the terms of the agreement with the current tenant if it extends past the date they take ownership of the property. The agreement means providing adequate property management. 

This means the sale of your property does not negate the terms of your lease unless it contains a special provision that is also upheld by state law.

Residential Tenancies Act

If you have any questions regarding your rights and responsibilities, you can refer to the Residential Tenancies Act, which clarifies the rules between tenants and landlords. 

Some of the items covered include:

  • Rent and how to handle past due rent 
  • Maintenance requirements
  • Entry into the unit
  • Repair requests 
  • Security deposit return

Call Freedom Home Buyers To Buy Your Tenant Occupied House

A sitting tenant can make selling a rental property less appealing to a potential buyer. However, you can eliminate a lot of the stress by selling your home with Freedom Home Buyers. 

We understand how to handle an uncooperative tenant or even bad tenants in an investment property in a way that corresponds with tenants’ rights and gives you the opportunity to wash your hands of the situation. 

Contact Freedom Home Buyers to learn more about how we can take your rental property off of your hands quickly and easily. 

Go here to send us your details, and let us solve your problem.