Putting a house on the market when you have renters in it

[luvflorida]

We have made the decision to put our house back on the market. We had it on the market from spring '08-spring '09. After a year with no offers, and sitting empty, we decided to rent it out. We went back and spent June and July at the house (the house is in a coastal town, a ten minute drive to the ocean) and our tenants moved in the beginning of August '09. Their lease is up the end of July '10.

Has anyone here had any experience with selling a house when it is being rented? The thing I'm concerned about is that the renters really have no stake in whether the house sells or not. In fact, it seems that they would not want it to sell. How can we be sure that they will keep the house looking good for prospective buyers, or that they will be accommodating as far as having the house shown?

We stipulated in the lease that, in the event that we decide to put the house back on the market, we would do it no sooner than two months before the end of the lease. The house will go on the market June 1st. We sent an e-mail today to the tenants, letting them know of our decision. We also told them that we understood our decision will have an impact on them, and that in appreciation for helping us out (by keeping everything looking good, having to leave during showings, etc.) we will give them a check for $2,000. if the house sells while they're living in it. We figure it'll be a good incentive to help sell the house.

We also told them that we're going to try it for six months and if it doesn't sell, then they are welcome to keep renting. Of course, we know there is the possibility that they will decide to leave at the end of their lease. Guess we'll cross that bridge when we come to it.

So, anyone with experience in this kind of situation? Suggestions? Criticisms?

 

[sparklynails23]

We rented a condo that was put up for sale. We would never have agreed to leave during showings. We were living there, and depending on how many showings there are, that would have been a real pain. We did keep the place clean. I think we got a couple months' rent out of it.

 

[merryweather20]

You can start with your realtor. I can't tell you how many times I came home to find the windows open, the heater or air conditioner on for no reason, all the lights on, little wrappers here and there, doors unlocked and my favourite the freezer door open (I was so mad at this point I told both the owner and the realtor that I wouldn't be cleaning it up, and all the food would be replaced at their expense).

Considering the condo was on the ground floor, it was a big deal when I came home to find the screen door wide open, so anyone could walk in.

I wouldn't expect them to leave for viewings either, and find out their schedule and be sensitive about it. For example my brother works all day Friday and then volunteers all evening until about 7am, so a viewing on a Saturday morning at 10am is ALOT to ask.

 

[bumbershoot]

As a happy renter, I am in LOVE with your 2K idea. Then again...it's not really their fault if it doesn't sell, so I would also be in love with a bit of a bonus if the realtors report back to you that things are in good shape, even if the people looking don't want your house for other reasons.

 

[Pomlover2586]

As a renter, I WOULD NOT be leaving during a showing.......you want to show the place? Fine.......but I'm gonna be in the house doing whatever I need to be doing- whether thats sitting on the couch in my pjs...vacuming whatever......

If you agreed to wait until 2 months before the lease is up then you should wait until the lease is FULLY up to put the house on the market.....

And no as a renter, I would not resign with you..... JMO

ETA: It is NOT my job to make selling your home easier........especially not when I currently reside in it.

 

[The Mystery Machine]

I just want to say good luck to you!!!!!

 

[lacrosse_lady72]

As a renter, I WOULD NOT be leaving during a showing.......you want to show the place? Fine.......but I'm gonna be in the house doing whatever I need to be doing- whether thats sitting on the couch in my pjs...vacuming whatever......

If you agreed to wait until 2 months before the lease is up then you should wait until the lease is FULLY up to put the house on the market.....

And no as a renter, I would not resign with you..... JMO

ETA: It is NOT my job to make selling your home easier........especially not when I currently reside in it.

Jeez, what ever happened to just being nice? I probably wouldn't re-sign but I would try to help the landlord sell the house... because, why not? At the least, I wouldn't try to make it worse. I would certainly not be in my PJs while potential buyers were there.

 

[Pomlover2586]

Keep in mind I would not do anything to intentionally ruin a sale- such as damage the property, leave it a pig stie, be rude to potential buyers etc......I'm just saying I would not disrupt my own life to help sell it. And that includes vacating the premises on a Saturday [or any day I planned to be home] when I should be relaxing with my family.

It may seem rude/uncooperative to some people, but bottom line is the only thing I'm responsible for as a renter is paying my rent in full, and ON time and taking care of the premises to the best of my abilities. Not helping to sell a house that I'm paying to live in. Now if the landlord was willing to let me out of my lease I'd be out within a month and they could do what they wished.......but I wouldn't finish out my lease AND help them sell the place- in which case I may be asked to vacate early anyway once the house sells.

 

[mking624]

Jeez, what ever happened to just being nice? I probably wouldn't re-sign but I would try to help the landlord sell the house... because, why not? At the least, I wouldn't try to make it worse. I would certainly not be in my PJs while potential buyers were there.

I agree.

Personally, I might try to not be around if there are showings, but that really depends on the number of showings. There might be times I'd have to be home. But I certainly would not make it difficult for the homeowner...because the bottom line is that I am simply the renter...NOT the homeowner. And if I agreed to the lease's terms, then the homeowner has the full right to act on them. In this case, the lease stated possibly placing the house on the market no sooner than two months before the lease's end date. Sorry, but a renter really has no say in a house that is not theirs when they agreed to a lease that had this stipulation in it. If that bothers a potential renter...move somewhere else, but don't give the homeowner a hard time just because you wound up not liking the lease you signed.

 

[Sleepy]

Don't be surprised if they leave once the lease is up. Then again, as a renter, I would have never signed a lease with someone if they told me they were planning to sell the house on a whim. Moving is expensive and the hassle of moving that soon is not worth it either. Forget having to find a place on short notice. $2,000 incentive is not worth it to show a house and be inconvenienced.

Personally, I would have appreciated notification by telephone, rather than e-mail. This is not a notification that their rent is past due. You are basically altering their life. A call would have been better, given the circumstances, then state that you will be sending them a letter so that they had it in writing.

 

[Pomlover2586]

Don't be surprised if they leave once the lease is up. Then again, as a renter, I would have never signed a lease with someone if they told me they were planning to sell the house on a whim. Moving is expensive and the hassle of moving that soon is not worth it either. Forget having to find a place on short notice. $2,000 incentive is not worth it to show a house and be inconvenienced.

Personally, I would have appreciated notification by telephone, rather than e-mail. This is not a notification that their rent is past due. You are basically altering their life. A call would have been better, given the circumstances, then state that you will be sending them a letter so that they had it in writing.

Agree 100%

 

[DisneyDizzy]

Just be nice about it. We're renters and came home to find someone putting a For Sale sign in the front yard. No notice. No nothing. I've been MORE than accommodating for the showings just because I'm apparently nicer than the owners. I've kept the house clean and left when needed for showings. Except for Monday when I was in the middle of having my baby shower (with a house full of visitors that flew 1800 miles to see me and help me get ready for baby) and the realtor was irritated we wouldn't leave for them to show the house. Which I offered to do the next day.

We went to them and told them we wanted out of our lease, which was up in July. I am pregnant and due July 15 so waiting until the lease was up was not an option. They agreed and I am fine with that and will be happy to leave. Especially since they weren't paying their mortgage and people keep coming by to serve them papers.

The house is in foreclosure and we would have had to move 90 days after our lease was up anyway. I just would have thought we deserved notice that it was for sale and would be shown. They are hoping for a short sale before the Foreclosure goes through. But considering "someone" keeps trying to serve them papers, I'm not sure it is happening. I just hate that we have to incur the moving expenses when we didn't plan on it. We are good renters, never ever paid late or complained, kept the house like it was our own and treated it as a HOME to us. We had already discussed renewing the lease. I just felt we deserved a heads up that they couldn't afford the mortgage and were putting the house on the market.

 

[simba20]

The house we are currently in, was for sale the first six months we lived here. WE moved in with the understanding that it was still under contract to be listed for 6 months, so we unpacked the essentials and lived out of boxes for 6 months. It had very few showings, but aside from one room full of boxes, we kept it decent for anyone who had to view it.

Now we are on the opposite side of this. we are in the process of looking for our first home as buyers. I came across a great listing online and gave my realator the MLS number. She contacted the seller's agent, who told her that it is occupied by a tenant who IS NOT allowing any showings of the home. Say huh? Their lease is up at the end of May, but they are being total butts about letting agents into the home. Ugh!

 

[golfgal]

We are debating about doing the same thing. We have been renting out our old house for almost 4 years and we have great renters but it would just be one less thing for us to deal with. If we go this route we will probably hire someone to come in and clean, at least dust, sweep and do bathrooms once/week or so just to make sure it is presentable. We have been very upfront with our renters that we might put it back on the market some day so they are aware of that. We have month to month leases so that isn't an issue at all.

I can't believe the attitude of some renters. Showings take about 15 minutes, what's so hard about stepping out to the back yard or walking around the block for that time? Trust me, you won't feel comfortable sitting in the house while it is being shown.

 

[belle&sebastiansmom]

We saw several houses with renters in it and it's the bad attitude that turned us off of those houses. Renters refused to get out of bathrooms, one house had about 30 people over for a party (during a prearranged showing), one just happened to begin mopping the kitchen when we came in and yelled at us not to go any further. As a buyer, I just felt like I wanted to get out of those homes as soon as possible, even overlooking the homes potential because of the current occupants. How can you completely check out a home you want to buy if people are blocking your way?

Our Realtor said she hates showing homes with bad renters because many renters do everything in their power to stop a sale. They don't want to be out of a home. She said what we saw was typical and that she even had some renters who just so happened to begin cooking foul smelling fish, at 8:30 in the morning!

Your potential buyers will also have to look past the renters decor, their stuff, and the messes. One we looked at was so cluttered it was awful. These people had hundreds of picture frames on the walls, floor to ceiling. That was just weird and distracting.

If you have to put you home on the market a couple of months before your renter's lease is up, good luck and I hope you have considerate tenants. If not, wait until they are out, clean up the home, and stage it to it's potential.

 

[wilderness01]

We are debating about doing the same thing. We have been renting out our old house for almost 4 years and we have great renters but it would just be one less thing for us to deal with. If we go this route we will probably hire someone to come in and clean, at least dust, sweep and do bathrooms once/week or so just to make sure it is presentable. We have been very upfront with our renters that we might put it back on the market some day so they are aware of that. We have month to month leases so that isn't an issue at all.

I can't believe the attitude of some renters. Showings take about 15 minutes, what's so hard about stepping out to the back yard or walking around the block for that time? Trust me, you won't feel comfortable sitting in the house while it is being shown.

I completely agree.

OP~I would terminate the lease 2 months early and move on to sell your house. Really I would take out any choice in the matter so the house could be staged and hassle reduced.

I rented 20+ years ago and would have never felt so put out especially if I had agreed to this in the lease. These reasons are why I would never ever rent a property. Hope your tenant is cooperative.

 

[Mrs.Toad]

If we go this route we will probably hire someone to come in and clean, at least dust, sweep and do bathrooms once/week or so just to make sure it is presentable.

This is a good idea.

We put our condo on the market while our tenant was still in it, but it was a month to month lease and she had lived there for about 5 years. She did look for a new place and moved out as soon as we told her we'd be selling it, I don't think she was in it for more than a couple of showings, but she was an awesome tenant, so we felt comfortable that she would have been cooperative.

We would have never put it on the market with the previous tenants, who were a huge pain in the neck with late payments, constant letters from the HOA for various covenant violations, etc. I never actually saw the place while they were in it, but I can't imagine it would have presented well.

So that's consideration number one. I'd only do it if it was a good tenant, but still, you never know. I think your $2,000 offer is very generous. I have never heard of anyone doing that before, and hopefully that will give them the incentive to keep the place looking nice. Honestly though, I would wait to put the house on the market, unless they've already indicated they're going to move when the lease is up. It's only been a year since you took it off the market, after having been on for a year with no offers? Unless the housing market has done a 180 in your area in the past year (it hasn't here), I would give it some more time.

 

[Lisa loves Pooh]

I have no experience, so take this free advice for what it is worth...nada.


Dave Ramsey who dabbles in real estate has offered the suggestion of offering a rental discount for a renter who will help keep the house neat and show-ready. This suggestion is usually offered when you already have a tenant. So for example, if there rent is $1000, offer than a rent of $700 (or whatever) if they keep the house ready for viewings.

The other option instead of renting--pay to have it staged and see if that helps.

 

[jen0610]

My brother has been thru this twice as a tennant. I'll give you the good and the bad.

The Good. They had been renting this home for a 1 1/2 years. Owner came to them and said that he was going to put it on the market. Even though the house was freshly painted and carpeted before they moved in, the owner wanted fresh paint, was putting in new carpet in those areas with it and the rest of the floors cleaned. He paid for the guys to stay in a motel for the time that it took to do all this, paid for their meals, as well as gave them $200.00 off their rent for the month.

On the days of the 2 open houses he had, he paid for them to go out to eat and a movie for the afternoon. He knew that they both had part-time jobs on Saturdays, so most of the showings were done on Saturdays. If they were home, usually on short notices, they would sit out on the lani while the showings were going on.

When he finally did get an offer, which was 5 months after he put it on the market, he had given them $100.00 off their rent, starting the month it listed. He let them know the day he accepted an offer. They had 60 days to move and half rent for those 2 months.

They still are friends with him and his wife.

The Bad. One of the realitors who had brought in a showing, had a BIL who ran a rental agentcy. He knew they guys would be looking for a place to live and had given them his card. He kept in touch with the guys, so when it was time to get a new place, they went with the BIL to find a new place. Said he had a place that had just be taken off the market and they were going to go rental. Both of the guys told him, that the owner needed to put into the lease that they would not accept a purchase offer on the house for a year and that there would be funds paid to them, IF he accepted an offer to sell, before they would sign a lease. The amount was based on some fomual, put it would be a pretty penny if he sold it closer to when they moved in, than closer to the end of the year lease. The owner accepted.

They had been there for about a month, when they asked if they could paint the master bed and bath. The owner said ok, but he had to give approval on the color. Not an issue with them, it's his house. Owner gave his approval. A week after they painted, he sent them notice that they had to move as he had sold the house. They had to be out with in 14 days.

While it didn't sit well with the guys, as they had to rent a storage unit and lived at a long stay motel, they knew that they had the clause in their lease to cover this happening and it would work out for them. WRONG!! The owner had to be taken to court, judgements awarded to the guys. Paid judgements, bounched checks, stopped payment on checks. Cost them lawyers fees, judge ordered the guy to pay them. It was a 2 year nightmare for them.

So, that's my brothers experance. I don't expect to ever run into someone else like who they delt with on the bad end of the stick. He was a piece of work.

 

[luvflorida]

I appreciate all the honest opinions and suggestions. Some of you have hit upon issues that I've certainly thought about and worry me a bit. And some of you have related some scary stories.

...If you agreed to wait until 2 months before the lease is up then you should wait until the lease is FULLY up to put the house on the market.....

And no as a renter, I would not resign with you..... JMO

ETA: It is NOT my job to make selling your home easier........especially not when I currently reside in it.

...It may seem rude/uncooperative to some people, but bottom line is the only thing I'm responsible for as a renter is paying my rent in full, and ON time and taking care of the premises to the best of my abilities. Not helping to sell a house that I'm paying to live in. Now if the landlord was willing to let me out of my lease I'd be out within a month and they could do what they wished.......but I wouldn't finish out my lease AND help them sell the place- in which case I may be asked to vacate early anyway once the house sells.

The only help we're asking of the tenants is that they keep the house looking nice and that they cooperate as far as having the house shown. Some responses on this thread have been an eye-opener for me, because I never really thought that a tenant would have a huge issue with leaving during a showing. I guess I assumed they wouldn't WANT to be there. And we figured the offer of a sum of money would help to alleviate any disruptions.

I can understand tenants not wanting to resign at the end of the lease, knowing that the house is up for sale. If the current tenants decide to stay beyond the end of their lease, we will go month-to-month. We don't want to lock into another year's lease. Nobody will be asked to vacate early from a lease.

Don't be surprised if they leave once the lease is up. Then again, as a renter, I would have never signed a lease with someone if they told me they were planning to sell the house on a whim. Moving is expensive and the hassle of moving that soon is not worth it either. Forget having to find a place on short notice. $2,000 incentive is not worth it to show a house and be inconvenienced.

Personally, I would have appreciated notification by telephone, rather than e-mail. This is not a notification that their rent is past due. You are basically altering their life. A call would have been better, given the circumstances, then state that you will be sending them a letter so that they had it in writing.

I don't feel like we are selling the house "on a whim". We have been very up front with our tenants as far as our plans for the house. They knew the house had been on the market before we decided to rent it. They knew that we might decide to put it back on the market at some point, and they knew when they signed the lease that there was the possibility that we would do so two months before the end of their lease.

As far as having to find a place on short notice, anyone that signs a year's lease knows that at the end of that lease they might have to move. A year's lease is just that, one year of renting someone's house.

We really didn't think it mattered if we called the tenants or e-mailed them. We've mostly stayed in contact with them through e-mails throughout the year, so I guess that's why we notified them in that manner.

Just be nice about it. We're renters and came home to find someone putting a For Sale sign in the front yard. No notice. No nothing. I've been MORE than accommodating for the showings just because I'm apparently nicer than the owners. I've kept the house clean and left when needed for showings.

Being nice about it is exactly what we're trying to do! You sound like wonderful renters, especially given all that has happened to you!

Our tenants knew that our house could go back on the market. We also thought it would be nice to let them know of our decision now instead of at the beginning of June.

We saw several houses with renters in it and it's the bad attitude that turned us off of those houses. Renters refused to get out of bathrooms, one house had about 30 people over for a party (during a prearranged showing), one just happened to begin mopping the kitchen when we came in and yelled at us not to go any further. As a buyer, I just felt like I wanted to get out of those homes as soon as possible, even overlooking the homes potential because of the current occupants. How can you completely check out a home you want to buy if people are blocking your way?

Our Realtor said she hates showing homes with bad renters because many renters do everything in their power to stop a sale. They don't want to be out of a home. She said what we saw was typical and that she even had some renters who just so happened to begin cooking foul smelling fish, at 8:30 in the morning!

Your potential buyers will also have to look past the renters decor, their stuff, and the messes. One we looked at was so cluttered it was awful. These people had hundreds of picture frames on the walls, floor to ceiling. That was just weird and distracting.

If you have to put you home on the market a couple of months before your renter's lease is up, good luck and I hope you have considerate tenants. If not, wait until they are out, clean up the home, and stage it to it's potential.

You have mentioned many of the things that we're worried about. The thing with putting a house on the market in New England is that there is a smaller optimal time frame for that house to sell than in some other parts of the country. It would be much better to put a house on the market at the beginning of the summer than wait till the end. Of course, if the tenants want to be uncooperative, then it isn't going to help either.