Selling a piece of real estate in most markets can be a challenge. When you are selling a property that has a tenant or tenants in it, it adds another layer of complexity to the sale. Over the next few weeks, I’ll discuss different tenant scenarios. Today let’s assume that you own a condo that is currently rented out. You’ve decided to sell the condo. In today’s real estate market, investors aren’t interested in buying single unit condos so your prospective buyer is an owner-occupant (bank speak for someone who will live in the condo).
When a buyer is buying your condo to live in, one of the conditions of their offer will be that your condo must be delivered vacant at the closing. Not only will the buyer require this but their bank will as well so the next question is whether your tenant has a lease or not. If your tenant is a tenant at will (where the rental period is 30 days and automatically renews each month when your tenant pays you their rent) then you can put the condo on the market at any time. If the tenant has a lease, then you’ll need to do some backwards checking with a calendar. It takes 45 – 60 days from the day you accept an offer to the closing. Determine what the average days on market is for your area and then put the condo on the market giving you enough time to find a buyer and close on the sale.
NOTE: When you give your tenant notice either that you are not renewing their lease or given them a 30 or 60 day notice to quit as a tenant at will, make sure you give them the notice before their next rental period begins. If you have a tenant at will that starts on the 1st of each month, you must serve them notice before the 1st of the month. If you give them notice on the 2nd of the month, then the current month doesn’t count and the 30 day notice doesn’t start until the 1st of the following month. The best idea is to have your attorney send the letter. If you’re doing it yourself, make sure to send a registered letter with a return receipt so you have proof you served the notice in time.
There’s one more piece to this puzzle – your tenant needs to cooperate and move out when they say they will or when their lease expires. Just one more reason to have a good relationship with your tenant. You don’t want to have your sale fall apart because they refuse to move out.
Selling with a tenant can make a sale more complex, but as long as you (and your agent) keep a good relationship with your tenant, it can work.