Randy-I am sure everyone who comments will agree that it is so difficult to deal with tenants.  I cringe when I see "tenants" under the occupancy column on the listing.  I want to share a tenant success story with you.  I was looking for a small condo for an investor from CA to buy for her pool of rental properties.  I went to see one that was tenant occupied (they were foreigners and had cardboard boxes for most furniture).  The husband was gone to work and the wife and baby were home.  Property was perfect and we went into escrow.  I went with inspector to conduct C-51 a week later (buyer still is in CA).  Inspector found leaking pipes under all sinks, poor hot water heater, and a small list of other items.  The Tenant was amazed at the thoroughness of the inspector.  I cleaned a filter for her in the bathroom ceiling fan because she was concerned about health problems for her infant child.  She said that she had asked the property manager to fix it several times to no avail.  Property fell out of escrow because of C-51.  A few days later the Tenant wife called me and asked me to represent her and her husband to find a home for them.  She said that she liked me because I cleaned her fan and because I was honest to my CA client about the inspection results.  Get this.....the husband is a Pathologist and the reason they were living out of cardboard boxes was because they didnt want to buy furniture for their condo only to have to buy new furniture for their house.  We are now looking for single family homes in the 1 mil price range!  Beleive it or not!

I have just entered into a listing agreement for a duplex, with one unit (the larger of the two) occupied by long-term elderly tenants.  The Seller has agreed with them that they will vacate their unit for inspections and for one broker tour.  After that, she promised them that there would be no showings of their unit until a serious offer surfaced.

I have done my best to promote the listing within my real estate community to get agents there for the inspection and the tour, and to bring their clients if possible.  We will also have a drawing of the floor plan of the occupied unit as well as photographs.

Did I miss anything?

Randy, I too cringe when a listing comes in with tenants, in fact have one now. The showing instructions are 24 hour notice to show, standard for tenants. Well I called them yesterday, both husband and wife, to ask if it was ok to show it today at 10am. I got a return call almost 5 hours later telling me "that won't work for me", she was snotty about it too.. I said Ok, when would it be convenient? She told me Monday at 10. I called the Agent wanting to show and explained it to him, he said well we'll be looking at another unit there and if we still want to see that unit I'll call you back. Never heard back from the agent. I told both listing agents to let the owner know they may have missed a sale today, the owner said That Will Not Happen again... We'll see...
In our area if the tenant has a lease, the new owner (as I understand the law) has to abide by the existing lease. I'm not sure what the situation is with this unit.

Randy...

Oh. Boy! You don't want me to get started on tenants.

Hmmm. Nope I better not. I think this topic has a 'vent' behind it :)

TLW...ROAR!

David & Tonya - We never know who is watching and who will be our next client.  How we conduct ourselves makes an impression on others.

Kelley - I think you have it covered.  The pictures are a big help.

Lysa - Here 48 hour notice is common with tenants.  If there is a lease it goes with the property here in Hawaii and most places that I am aware of.

TLW - A vent and a lesson.  It is fun when you get started.

In the midst of this right now you covered the highlights well.

Teri - Thank you, our business would be boring without these added challenges.

Amen Brother - I have had my exeriences good and bad.  Good piece of advice you give.  As more and more investors bought rentals in 2005 the more we will see listings coming on the market with renters.  "Lets get ready to rumble"!

Boy tenants are a trip.  I have had nothing but bad experiences when tenants are involved.  Tenants who won't move out until 12:00 a.m although the closing was at 5:00 p.m.  Tenants who won't move out at all! It is really a difficult situation! 

When you have a good property management company, that includes provisions in the lease in the event of the owner selling, your problems become pretty much nil.

George - Thank you, in our market a lot of the rentals were converted to owner occupied.  As the rental market gets tighter the tenants get even more defensive.

Joan - I try to be patient and nice.  The last thing I want is a disgruntled tenant.

Christina - A good property manager can help.  If you get the listing and not the property manager they can also be a fly in the ointment.  The laws in Hawaii as many places give the tenant most of the cards.  I have seen the greatest tenant on earth can become your worst nightmare.

The one thing that I dread is when I take a listing that is vacant and before the property sells, the seller decides to rent it until it sells.  We've managed in the past to make it work, but it is not always easy.

Randy

Judi - In our listing agreement it states that they need to keep it vacant.  That is not always possible if they need the cash flow.

Aziz - I am always will to go the extra mile for a motivated client.

Randy, I did a loan last year for a young kid who was buying his first Condo.  There was a tenant in the Condo who also happened to be handicap.  The loan was a CHFA Loan which has a 120 day rate lock.  It took all 120 days to get the tenant to move out.  It was a real nightmare.

I always stay away from listings that have renters in them......I let you go now!

When you are selling a multi unit house, it is wise to let the renters know you consider they are the "owners" of their unit for 30 days at a time.  Praise them for being good tenants, and let them know not to feel threatened or skiddish when you call.  Tell them the  person buying will want super duper tenants like themselves...watch them turn ten shades of red and say "ahhh gee" beaming. You want the tenant on your side.  If they are not particularly fond of the landlord, let them know the next one will no doubt do those little repairs...and ask them within reason, what could improve the place without costing all outdoors.  They know the place and often will suggest how to save on heat, which one tenant is a trouble maker that others get riled over, etc.  If there is an empty unit, try to get someone that gets along with the rest of the group..ask other tenants to help in the search for the Mr Rogers mild mannered renter who goes to bed at nine and everyone likes.  Give a day's warning...don't just barge thru...would you want someone arriving out of the blue with little or no notice? Bring only qualified buyers thru..and remember the seller hired you to sell the property...no chase away or harass his tenants.  So many tenants feel like brokers consider them one knotch below farm animals..parading in two hours late, or not calling if its going to be a no show...after many tenants leave to make the showing easy and end up wasting an hour of their Saturday for the dog and pony showing that never happened.  They tenants may become a future customer to buy someday too...while you are waiting for the prospective new owner to show up, tell them about financing, etc. Your job is to reach new prospects, to circulate and find new prospects...in that five unit, you have five potential customers who know others needing real estate services.  In a single family situation, you have to let the renter know they are that..a renter but you can make them a buyer if they get qualified, etc.  If they don't, make sure they don't take the one of the buyers aside and indicate they are buying s that the buyer ends up feeling like this one is gone.  Some renters kinda like the place and don't want to see it sell as they will have to move.  So they can bad mouth and in the case of a place with a private water source some have been know to respond to the buyer's questions "How's the water ?" with a "Well..the kids are sick alot...but maybe its not the water". Let the seller know there is sabotage a foot and if need be let the buyer know the water test is a small matter to clear that myth up.  And ask the renter, "So you're saying you are getting your drinking water from somewhere else? " When they say yes, ask them where the containers are they use to haul all their drinking/cooking water and watch the jaw hit the floor during the pregnant pause when Mister Bad Drinking Water is suddenly at a loss for words.  You may have to replace the renter too if the bad mouthing continues or the prospects feel badly that if they buy, that that nice renter will have to move and they hate to be the cause of the disruption. 

Don't get me started! I think we're all with you on this one pal

I had one situation with tenants also... 

They were paying below market rent for a great 3 bedroom 2 baths unit in an affluent neighborhood.  When they were told that the building is being sold they at first was very welcoming and seemed to want to work with me.  But when the first Sunday open house roll around, they would not leave the house vacant, and insisted that this is the only day off they have and the whole family had to stay at home and enjoy their family day together.  They were watching TV, cooking, walking around, etc., while the open house was going on.  So I have to cut it short and left early to prevent any prospective buyer being deterred.  

Then it only got worst, I tried to contact her and give her a 24 hours notice to show unit during the week day.  She will never answer the phone.  So I was forced to leave her a message and not sure whether she got it or not.  So every time I had to haphazardly enter the unit thinking that someone might be inside.  Sometime they were and sometimes there weren't.   And almost all the time when I was able to go in while no one was there the back bedroom door is always locked!  So I have to call her again so many times to reschedule... Gosh!  That has been the biggest nightmare I have had with tenants.  Not to mention the back stabbing and trash talking the tenant was saying about me to the seller.

But what made it worst was not the tenants, but the sellers.  They weren't very helpful and were actually being victimized and scared of talking to the tenants.  The seller must have been bullied by the tenants for a long time already.   Anyhow, make a long story short, my consistency and patience eventually paid off.  When they were mad and nasty with me I just kept my calm and be better and nicer to them.  There was no way to get mad at them as it only shows your weakness and they will win.  

This is just my 2 cents with tenant, I hope you get something from it.  But I would really recommend consult with a lawyer whenever you have any tenant / owner situation as that is not our best interest to be a part of it.  

Gary 

George - My worst was one where I represented both the buyer and seller.  The buyer needed to close the sale which we did.  It took a few more months to get the tenant out.  My buyer was going to take a financial hit as a result.  Without hesitation I pulled out my check book and wrote a fairly large check to cover her losses.

Michael - I don't always have that option.  I have turned down a few because of the tenant situation.

Andrew - Fortunately we do not have heat or private water sources here on Oahu.  Two less things we have to deal with.  I always try to accommodate the tenants, but the reality is some will not work with you and you then need to go to plan B.

Adam & Sharon - I wouldn't want to get you started.  LOL

Gary -   You hit on a great point.  When they have below market rents they will generally be less than cooperative.

Tenants can really complicate a sale.  I'm just getting ready to list a nice property this week and it's the same situation.  Many thanks for sharing your thoughts  on this--I'm sure it will help my sale.

Diane - I have an apartment house coming up.  All offers will have to be subject to inspection, because we have no practical way to show the units to prospective buyers.  Investors understand that on a multi-unit dwelling.  When it comes to single family units it really is a disadvantage to the seller.

Randy, I am about to sign a listing agreement with a seller, who has tenants on a month-to month basis.  I met with the nusband, who seemed nice enough - he was ok with lockbox (as long as I give him notice); I even brought couple of listings in his price range, hoping to kill two birds with one stone (the owner really wants them out); he said, when I tell him that I have an offer, then he'll utilize my services to look for another place to rent.  My big problem with it, is there is A LOT of chachkes all over, walk-in closet is filled to the rim, guest bathroom is a mess! I actually politely suggested to pack some things up, of course he balked at it (are you trying to tell me which things are more important than others?); I don't even know the best way to take pictures without including all these things in it.  Do you have any suggestions on the best way to handle it?  Not taking the listing is not an option - a seller is a sweet older lady, who is counting on me to get her out of this mess.

Vita - The tenant could be given plan A and plan B. 

"Plan A" is the nice way.  He helps you sell it by cooperating and cleaning it up.  You then do eveything possible to help him relocate if the buyer does not want a renter. 

"Plan B" you get the eviction notice today, so we can sell the home.  Either way the home is to be sold.

I find most tenants will work with you if you show a willingness to minimize their pain and inconvenience.

Thank you Randy for your response! 

Vita - You are most welcome