2 WAYS TENANTS COULD BE HOLDING UP YOUR SALE
January 3, 2017 | Richard Sites
Jupiter and South Florida are prime locations for second homes and many of these homes or condos are rented while the owners are not in town. But tenants could hold up your sale when you are ready to sell if not handled right.
Sure, having tenants help with the carrying costs of a home is fine, but when it is time to sell there are a couple of items you need to consider that could really impact your ability to sell and move forward.
Problem #1: A Lease Survives a Sale
This means that even if you sell your house, the tenants still have the right to remain there under the lease. So, in a sense, the tenants “own” the house. They don’t have title, but their presence can have a tremendous effect. How?
If there is a long term lease in place, you must find buyers who want to keep the tenants in place and not live in the house themselves, in other words buyers who want to be landlords. This fact alone dramatically limits the number of buyers for your house.
Problem #2: The House is Not “Show Ready “
I know there are plenty of fine tenants out there. In fact, in this area it is not uncommon for rentals to command $10,000 – $15,000 per month or more so folks that can afford this amount are going to take care of the property.
But will they keep it show ready and make it easy to show?
Well, if the house sells, they may have to move so making it easy to show and show ready may actually be working against their best interests. Most often in the MLS, sellers allow the tenants to dictate the terms of showing.
When looking for properties to show, I often see instructions telling me there are tenants in place that must be accommodated. I think this is the tail wagging the dog. Who owns and is selling the house?
So, if you plan to own a second home in Florida and rent it out, but later may sell it, here is an easy solution to avoid problems.
Sign a short term lease with tenants that can continue month to month after it expires. This way, you can ask them to vacate with 30 days notice.
Also, include language that says tenants agree to keep property in show ready condition if and when you decide to sell. They must do this every day and be ready to show the house on short notice.
Agents working with buyers know the situation can change nearly minute by minute so if the buyers decide to see your house, it must be ready and accessible.
Accessibility is one of the 5 things that sells houses and over which no real estate agent has control.
Question: Do you have tenants in a house you are trying to sell?
If you would like to have a no-hassle conversation about getting your house sold in this hot market, contact me directly at 561.762.4073 or use the form below. Remember: Hope is not an effective selling solution.