Homes that are revenue properties with tenants in them may not be sold as regularly as homes that a primary residences for the owner, but it’s not exactly an uncommon scenario either. Particularly if you’re a real estate agent working in one of the Canada’s big metropolitan areas. Listing a home with tenants currently living in it is going to present a different set of challenges for a realtor, and as is always the case if you’re equipped with the knowledge to meet those challenges and sell the home for those clients in a reasonable period of time then you will definitely be making a favourable impression on them.
All of which is important, because in the same way that establishing clients is difficult, having repeat clients is preferable. You start at the start naturally, and here at Real Estate Leads our online real estate lead generation system is a proven-effective way of being put directly in touch with individuals and couples who are legitimately considering buying or selling a home in the near future,
And yes, it may be the possibility that they are selling a home that’s been a revenue property for them that they’ve been renting out. If that’s the case, it’s not going to be as straightforward as if the owners were living in the home.
Let’s look at the best approaches to selling renter occupied homes here today.
Sell the Home Once It Becomes Vacant
Waiting until the tenants’ lease is up and then selling the home after they’ve vacated it is the best option, but obviously it may not be be possible. If it is, though, you then hold off on listing the property until it’s responsible – and legal – to insist that the tenants vacate the property. The sellers gets flexibility with staging the home and showing the property. Do keep in mind the changing average days on market for homes in the region and be conveying this to your client – with a particular focus on how long they may need to go without revenue for it.
If the renters are on a month-to-month lease, follow Provincial laws and be the go-between to deliver proper notice to end the tenancy. Most Provinces require you to give the renter a specific period of time to vacate without cause. If they are on a fixed-term lease, keep in mind that lease does not disappear or become invalid just because the owner now chooses to be selling the property.
Sellers need to honour the rental contract, unless of course the owner and renter can come to a mutual agreement to end the lease early. This does happen, although just as frequently it doesn’t. Sometimes your client can offer the tenant a move-out settlement, which could include the rental rate times the number of months left on the lease, moving stipends, or a deposit and first month’s rent on another rental. All are good suggestions and show good faith on your client’s part.
Sell the Home While It’s Occupied
Here’s where it gets challenging – Your seller may not want to wait for the lease to expire or give up on rental income as the property remains vacant while it’s on the market. In such cases, the agent will need to work around the reality of renters living in the property.
As the realtor, it will be your job to coordinate between the owner and the renters, and you need to really be proactive and take the initiative with this. Open and active communications always make this a much smoother process.
Start by telling your seller that they need to ensure their renters are entirely up to speed about the selling process, and they should encourage the renters’ cooperation by whatever means necessary. It is also a good idea to check the lease agreement for any clauses that relate to a renter’s cooperation during showings.
Showing a Renter-Occupied Home
It’s pretty straightforward to imagine that showing the renter occupied homes is where the biggest challenges might arise. That’s correct. Homes can stay on the market longer than necessary if the condition of the property is less than ideal, so it’s important to work with renters to keep it in as showing-ready condition as possible as often as you can. This can be tricky, and especially so if the renters not particularly keen to see the home sell quickly and they have to move.
Follow Provincial Laws and the Lease
Provincial laws will determine how much advance notice you will need to give renters before you can enter the property for a showing, inspection, staging, taking pictures, maintenance, or repairs. Most Canadian municipal jurisdictions will have bylaws where a 24-hour or longer notice is required to enter a property for a non-emergency issue.
You can also expect some renters to be frustrated at the way the showing times will impinge on their privacy. Again, try to work with them as best you can give as much advance notice as possible for anything that may involve them. Offering incentives is a great way to encourage tenants to accommodate showings is to offer incentives. Here’s a few that your client may find agreeable:
- Rent discounts: Offering a monetary reward for helping an owner sell a rental property is going to appeal to pretty much any renter. Have your client offer them a reduced rate as compensation for the temporary
- A weekly or biweekly cleaning service: This will keep the house show-ready and encourage the tenants to maintain tidiness in the home. It may even help tenantsget their security deposit back.
- Restaurant gift certificates or movie tickets: this gets tenants out of the house during showings and they get to enjoy themselves at no cost.
- A hotel room during an open house weekend: Tenants will like having a nice place to stay for those weekends when open houses are scheduled for Saturday and / or Sunday.
Taking steps to include current tenants in the selling process is always helpful when selling a home with tenants. If your seller can be made to understand the importance of communicating with their renters it is extremely beneficial and conducive to selling that home that much more quickly.
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