Selling With or Without Tenants in Place
Seems like every time I meet a seller who is hiring me to list a property they have rented, I get very anxious reactions about the suggestion to list after the tenants have moved out, or to financially incentivize them to be part of the process. (The latter usually means offering them a free month’s rent or discount on rent if they comply with showing requests, leave the home neat and the house is under contract quickly.) Landlords are quick to become fixated about the cost of such ideas.
In the case of the Parks at Piedmont South Condo pictured above, the landlord-seller was very smart. When attempting to first list the home with the tenant in place, she cleaned the home herself and put the tenants up in a hotel for the weekend. Nothing was going to stop buyers from hemming and hawing about the condition. The tenants had painted some loud colors, left the carpet a disaster and the walls in the stairway were very marked up. It felt shabby. And because the condo didn’t go under contract during the weekend the tenants were out, we dealt with limited showing availability and deteriorating show condition. It was no surprise when the buyer under contract to purchase got cold feet and bailed, having been in a competitive situation with three other buyers. That’s when the seller went down the track of improving the home once the tenants were out and listing again…$25,000 higher.
Having a conscientious seller that cared about the condition of the home was a blessing. The market had cooled since the initial listing at $325,000. Listing at $350,000 with new carpet, fresh paint, a new refrigerator and punch list items fixed, my next step was to do some light staging and order another set of professional photos. We wanted the fresh face of the improved listing to lead the way.
Even with all that, buyers seemed to want to tire kick more than usual. While this was literally the only property with three bedrooms available to buyers under $400,000 in Gainesville or Haymarket, buyers wanted to will a market crash into existence. Buyer agents chimed in with the verbal lowball offers from their clients. Then, one savy agent stepped up to the plate with his ready, willing and able buyer. While lowballers were circling, the serious buyer made a deal and today, they went to closing. The property sold for $352,400. The additional sales price more than made up for the less than $2,000 the buyer requested in closing cost help. Did I mention one of the lowballers wrote an offer at $280,000? Yikes. Talk about trying to will a market crash into existence.
When the time comes to sell your tenant occupied home, my advice is to get the tenant out, improve the home and then list for the best result. The money saved in attempting to dovetail a sale with the end of the tenants lease is usually not equal to what you would net in a higher sales price even with additional costs. Get in touch and let’s talk.
Chris Ann Cleland
VA License #0225089470
Long & Foster Real Estate
Call or Text: 703-402-0037
The opinions expressed in this blog are those of Chris Ann Cleland, not Long & Foster.