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4 Ways Your Tenant is Screwing Up Your Sale

Dear Landlord,

I’m sure that your tenants in the house you are trying to sell are very nice people. But when I went to show it, there were a few things that you probably don’t know are happening. Things that you might want to talk to them about before you decide that your Realtor isn’t doing his/her job.

Cooperation when making appointments

Just like selling any other home, it’s important that it’s easy to show. When a tenant won’t allow a lockbox and insists on being present for every showing (which means working around their schedule) the only person losing is you.

Buyers have a long list of homes to look at and they do it on their own terms and timeframe. If the only appointment we can get is every other Wednesday at lunchtime, believe me, we will have found another house long before we get into yours.

Might I suggest that you have a heart to heart with your tenant? A lockbox is a necessity. I can assure you that no one is going to steal their beer can collection.

Keep It Clean

I don’t know a polite way to say it, so I’ll just be blunt. Your tenants are pigs. The floors are filthy, the sink is overflowing with dirty dishes, laundry is piled up everywhere and there is apparently a science experiment taking place in the bathroom.

People don’t buy dirt…not at the price you’re asking anyway. Not everyone who looks at this house is an investor. As a matter of fact, most of them aren’t. They are just regular people who are trying to find a home within their budget that they can be happy in and that they don’t have to shovel out before moving in.

Pets

Remember that clause in the lease that says “no pets”? Your tenant doesn’t.

Between the pit bull and the stinky rabbits, we weren’t sure if we were going to be on the losing end of the circle of life or witness the miracle of birth. It’s time to make a surprise visit and enforce the rules of the lease. If you are allowing pets in the house, I hope you got a fat, non-refundable deposit. You’ll need it to clean up this mess when they are gone.

Loose Lips Sink Ships Sales

Most tenants are very concerned about whether a new owner will allow them to stay and have a tendency to point out every flaw in a property when potential buyers visit.

Did you know that the dishwasher leaks, the garage floods during a hard rain and and you have to jiggle the handle on the toilet to keep it from running all day?

Thanks to your tenant, my clients do.

Wishing you the best of luck with your sale,

The buyer’s agent

Posted by Lisa Heindel, New Orleans West Bank Real Estate on 02/28/2009 11:45 PM

Comments (52)

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Originally posted at: New Orleans West Bank Living and Real Estate News: 4 Ways Your Tenant is Screwing Up Your Sale

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52 Comments on 4 Ways Your Tenant is Screwing Up Your Sale

FEB

Hi Lisa, I had a 'meeting of the minds' with my nephew when I sold his Ann Arbor duplex. We discussed the importance of easy scheduling, super cleanliness & the importance of the tenants NOT being home during showings. The solution (made by my smart nephew) was to offer his tenants a big fat restataunt gift card for their help in keeping the unit super clean for showings. It did work like a charm. I sold the duplesx in just a week. The new owner allowed the tenants to stay & the tenants got their big, fat dining gift card!

MAR

I feel your pain. It is so important but hard sometimes. The landlord can ask, plead, beg, all they want and still may not make it though to the tentants. But what ever it takes, get them out. And thanks you to you someone is getting on the right page. Good for you for helping the sellers.

Most owners are worried about holding costs by waiting for tenants to vacate before placing the home on the market, but it really is the way to go when possible. Tenants typically have no motivation. They will often demand the notice allowed them by law before someone can set foot in the home to show it, will see no reason to clean the place up for a prospect. I have found that tenants are just a great way to keep a home from selling. When there is no option to wait for the tenants to vacate (which permits the ability to showcase the home to its fullest potential and allow the immediate access that is vital), I have had success with encouraging the owner to incentivize the tenant. Give him a break on the rent or some other spiff if the house sells within 60 days, etc. You have to give a tenant a reason to be a part of the process, otherwise they just don't want to be bothered and will act accordingly. Good stuff, Lisa.

Yikes,

I'm sort of lucky in that I've never had this problem with a seller, but I have shown tenant occupied houses to buyers, and it can be so awkward while they're there. My neighbor had a similar problem selling her home, except her "tenants" were family members living there rent free. She finally sold it, after 5 years FSBO & with 3 different agents, about 2 months after the houseguests moved out and took their junk, pets, and farm animals with them.

As a stager, I have gotten involved in this in the past since it is all about the presentation of the property... I have been successful with the method Marion suggested - the seller giving them some incentive that makes them see a positive result for them in keeping the home ready to show...

he he he.. so true... but I do get a chuckle. I showed 5 properties today and three of them were tenanted. They were all very messy, not staged, only one tenant was home at the time.. he was very nice, telling us everything that he was fixing in the house because either he broke it or the tenant before him did. The other two were actually gone, but their places also were quite messy.. Oh I said that already, can I also say.. they were quite messy?

When we are in a market like we are in, we need to make sure our properties are:

1- Priced correctly

2- Staged -- Look the best of ALL the others on the market at this same price or above.

Thanks for the post..

Wow Lisa, you must have just showed the house that I did last weekend. The description was unbelievablely accurate right down to the pit bull that had to be moved from room-to-room ahead of us and the rabbits. The tenant answered the door in her pajamas and her kids were underfoot for most of the showing. Good times.

Hi Lisa, OMG I feel like you were a fly on the wall on a few of my showings.

move the tenants out ... move the tenants out ... move the tenants out ... move the tenants out .... am I helping to get the point across?

You might be a redneck if.... you raise rabbits to feed your dog.

I have experienced similar situations when showing tenant occupied homes.

Lisa, this was very entertaining and very true!! I got more than a few chuckles out of it and would love to pass it on to my co-Realtors in the office! Very good! xxoo

Lisa, straight and to the point.

Some tenants do hold up the sale.

I showed a condo a few weeks ago and the tenants were there, told us more than the seller ever would have. Yep, loose lips sink ships.

Marian, offering an incentive to the tenant is a wonderful idea! I've done that before with kids (to get them to keep their rooms clean) but not with tenants.

Kim, too many landlords just collect the rent and are not concerned about what's going on behind the doors. It makes it hard for the agent when we have to be the bad guys and deliver the news about why it's not selling.

Paul, I would love if every investment property was vacant, but that Utopian world ain't gonna happen. A girl can dream though, right?

Raine, I had a rental property listed that was occupied by family members last year. They were harder to deal with than any other tenants I've seen and mad because they had to move.

Joanne, this house was a poster child...not only for staging, but for Merry Maids.

Darren, hopefully the rock bottom price outweighs the dirt.

Erik, isn't our job fun?? Oh, the glamour of it all!

Lisa, we've all been there...people are people no matter what part of the country you are in.

Pangaea, from your lips to the seller's ears...

Georgina, LOL!

Gita, haven't we all? I just cringe when I make appointments and hear "the tenant will be there to let you in"

Susan, pass it along all you want...glad I could make you smile :)

Missy, it's amazing what a tenant will say. If the seller was a fly on the wall during showings, I'm sure that the house would be vacated in short order.

So Funny! - You Nailed it! This happens often with us since we manage property that the owners decide to sell later down the line. While what you have described is typical, another approach would be to prepare the potential buyers to "expect" to see this kind of stuff in some of the tenant occupied homes.... remember, if they are not a rent-to-own candidate, some of them just lack homeowner mentality.

You said it girl! It's frustrating but unfortunately what PM's have to deal with. KM

Lisa: Every listing I've ever taken that had a tenant in it was a problem. It's either a mess, or not convenient for them....EVER....to show it.

And I've tried to show tenant-occupied and it's the same thing. Sellers' need to sit down and have a real "heart-to-heart" talk with their tenants, and let them know they will be getting reports back from us if they don't work with us.

Oh, sorry...did I just type the wish?

midtown atlanta condos

Oh MAN! I read the title & it brought back horrible memories! I offer a $500 incentive to the tenants if the property sells while they're are in it! Sometimes a thousand!!! The seller pays it of course.. IT'S WORKED GREAT!

Diane, I love that comment..."lack homeowner mentality"!

Kristin, thus the reason why I am NOT a property manager ;)

Thom, seems to be a problem everywhere...what is it about tenants that makes them so darn messy??

Greg, it sounds like bribery is the suggestion du jour!

Trying to sell a house with tenants living there can be an adventure. I once sold a duplex where one of the tenants was obsessed with the movie Scarface and he had just about every form of memorabilia you can imagine all over his side.

JL, yikes! That would make me more than a little nervous!

Lisa: I love the way you tell it like it is. I own 2 rentals, and if I were selling either one (to anyone but the current tenants) I would pay the tenants to move before I put it on the market. It will probably be a term of the sale anyway, so why not get it over and done with so I can stage and get the highest price. I know some property owners think they can't afford to do it that way, but can they afford not to?

MAR

It makes it so much more difficult when there is a tenant in the home you are listing...A good tenant is priceless.

It is always a night mare when trying to sell a home with tenants. No matter how good they tell you they are going to be it never works out that way.

Michelle, I don't know any other way to tell it :)

Chris, yes they are...unfortunately, most tenants either just don't care because it's not their house or they are trying to keep the house from selling so they don't have to move.

Bill, I've actually run into a couple of good tenants over the years...but just a couple out of how many???

Lisa, I always cringe when I realized my clients want to look at a tenant occupied showing for just the reasons you outlined!

Lisa those tenants can be a pain. This is one reason we keep quiet when we are selling. I never let my tenants know.

Diane, that's assuming you actually get an appointment, right? :)

John, if the tenants don't know you are selling, how do you get potential buyers into the property?

Lisa, at least you were able to show it! I scheduled 4 appointments to show a tenant occupied home in December & January -- no lockbox, by appointment only. We had appointments 4 times but they were never home!!! I called the Listing Agent to help with scheduling -- no response. I emailed the Listing Agent to help with scheduling -- no response. Bet the owner is wondering why his property hasn't sold. My client was very interested in this property because of the location but they bought another property.

Judi, yikes! I wonder if the listing agent is telling the seller about the issues? I guess not if he/she won't even respond to requests for help in actually showing and selling the place. Grrrrr...I hate when agents like that give us all a bad name.

MAR

OMG! as my 16 year old daughter says! Thanks for posting this. We have seen a lot of homes on the market in Austin that are now leased because of longer times on the market and your post is very timely! I am going to send this link to some folk who really need to read this! Thanks!

move the tenants out ... move the tenants out ... move the tenants out ... move the tenants out .... am I helping to get the point across?

I am echoing this sound advice - I just went over this with a house I looked at to list, I will when the present tenants move. Then a few things need to be fixed, painted, repaired and it can go on the market.

Russell, LOL! It's difficult for the owners...they want to keep the cash flowing as long as possible, but at the same time they want to sell. 99% of the time you can't have your cake and eat it too.

Kathleen...sigh...I wish it could always be that way, but the reality is we'll continue to have to deal with uncooperative and messy tenants.

MAR

The tenant in one of my listings just moved. Hallelujah! She insisted on being there, was in violation of her lease (2 people in a studio), and generally uncooperative. You are so right!

Lise, lucky you! Hopefully you get it sold quickly before the owner decides to fill that vacancy.

MAR

I have a short sale listing to close later this month and the tenants are demanding an outrageous amount of money and free rent because they didn't have 60 days written notice. They had 45 and orally agreed to a date. This is not fun and I am bracing t see what the place looks like when they leave.

LOL! So funny but so true! On a current listing of mine my sellers offered the tenants a reduction/incentive of $250 off each months rent for the inconvenience of always being cooperative to show the property and have it clean at all times. It has worked out great!

Janice, yikes! It's awful that we have to worry about the stupid things people will do.

Yuri, it sounds like a lot of sellers are realizing that they have to do something to get the tenants to cooperate. Smart sellers.

Great, funny and so true, Lisa. I've got one of those right now and I'm showing it with tenants for the first time. Should be interesting.

I would never put a lockbox on a tenant occupied property. Here in California we have to give a 24 written notice to enter so it is not practical to use a lockbox. The liability is also too great if the house is shown without the tenant there. Pets and claims of something missing are possible problems.

When selling it is much easier vacant. But, a cash incentive to help sell might be a good alternate.

MAR

Kelsey, good luck!

Robert, 24 hr written notice? How the heck do you ever get to show anything that's tenant occupied?

If the landlord really wants it to sell. The landlord needs to give them the incentive. Help with next deposit. 1st month rent. Something. I see alot in this market 24 hour notice to sell. It's very difficult with tenants. Good Luck

MAR

I just experienced this today....I took my young buyers to look at a tenant-occupied townhouse. Lo' and behold--when we arrived, the tenants were there....the woman was a chatty Kathy---and could not wait to discuss the property with my buyer....not just the property, but the location, the neighborhood--yes, even the neighbors....I was cautiously patient--but pulled my clients out of there as soon as we viewed the listing....Meanwhile, the little dog likes to bite!!

MAR

There is nothing worse than trying to sell a tenant-occupied property. Forget about cleanliness.. . . .there is usually little cooperation in confirming appointment requests.

MAR

I prepare buyers for this and I explain the realities of tenants not wanting to move and will therefore want to queer the deal. I also issue horse blinders to my buyers so they can overlook the shit.

MAR

Yes, That is all so thru, I agree with you 100%. I so many houses chewed up by the pets that is why I would rather sell than rent.

Tenants can and wll really mess things up. When I was getting ready to buy my duplex, the tenants were first uncooperative about showing times. Then they stomped and clomped upstairs, while I was checking out the downstairs. Then they tried to scare me by saying someone not only died, but hung himself in the attic.

Then they tried to appeal to me by saying this has been their "home" for 5 years. Then when I offered to let them stay, but to move downstairs while I live upstairs, they huffed "and downgrade our llifestyle?" Oh, it's not okay for them to "downgrade" but it's okay for ME, as the new owner?

Not the first time I've run into tenants like that. Sellers may be better off asking tenants to vacate. I know they'd be sacrificing loss income....but the place may never sell with them there. One of my clients had to sell her condo due to severe financial distress, but the tenants wouldn't allow anyone to look. And even when people did manage to come (at our insistence), the tenants made it absolutely impossible by having a lot of people there, turning up the music loudly, leaving it messy and smelly. So we couldn't get any offers. My client finally lost it toforeclosure. And then the tenants stole the washer and dryer. That's the absolute WORST!

MAR

Pacita, wow! That hanging story takes the cake!

MAR

Great post! I happen to have a couple listings that would definately be easier to sell with Tenants gone. Here is a recent occurance for case in point...

Recently we had a confirmed showing and when the Agent showed up to the house with Clients in tow, they were met at the door by furious Tenants claiming they were not informed and were caught in the middle of "making love"! The man was wearing only his underwear and the woman was cloaked with a blanket in this display of implied intrusion.

The would-be showing Agent was unscathed and simply appologized while being verbally assaulted with explatives I cannot repeat in this or any other forum. When I called for feedback, she did reply that she felt the entire scene was "staged" and a "show" put on by the Tenants. They obvioulsy did not want to leave and would prevent the sale of this home.

I have advised the owner to evict the Tenants which is what is in progress now, and this is a short sale listing so time is of the essence of course.

I hope others are able to avoid this scenario.

Ray Spitler, GR, e-Pro
Certified Short Sale Expert
Keller Williams Realty, Saginaw, Midland, Bay County Michigan
www.MBShomes.com

Ray, I'm sorry, but that story just made me laugh out loud! I wonder if the tenants think that same scenario will work if the house is foreclosed on because they thwarted every attempt at a sale and they end up tossed out in the street??

I'm sure it's been said before, but in some cases "the tenant has to go before the house is ready to show".

Have a great weekend.

MAR

Unfortunately - all of these sound too familiar. I have my fingers crossed the tenants in a short sale will be on their best behaviour until closign this Friday

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