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Should Tenants stay or go during Open Houses and showings?

By
Real Estate Broker/Owner with Lucky Star Realty

There are two sides to the issue of should tenants stay or go when a property is being shown, whether that is during an open house, or an agent is bringing a buyer to the property.  ON the one hand, the best case senario for a property to be shown is to have it be cleaned and vacant.  The property needs to be vacant when an agent brings a buyer to view the property because then, the buyers do not feel intimidated or that they are being "watched" while they are at the property.  Also, they can freely express their views, likes and dislikes, amongst themselves and their agent.  ON the flip side, if a property is being shown that has tenants living there and the tenants have property missing or destroyed aftar a showing, they are more likely to blame the showing agent and buyers, so in this case, it is best to have the tenants stay home, yet be out of the way, so that when something goes wrong or missing, they do not blame the buyers when it is not their fault. 

We recently had two tenants living in two seperate listings call and cancel on their open houses.  A few days ago, both sets of tenants had agreed to allowing our company to hold open houses this weekend, but this morning, both tenants called to cancel for some reason or other.  I contacted one of my sellers who had one of the listings and she was not pleased.  She claimed that the tenants had agreed to allow us to market and show the property as need be during the coarse of their tenancy because they knew and agreed to the house being for sale on the market as they were living there.  Both parties agreed to this in writing on the rental contract.  This was something that I had forgotten too, that the seller included these points as terms of renting their property to the tenants. 

So who is right and who has the final say so, the tenants or the sellers in whether or not our company can conduct an open house on the property.. if the tenants do not agree to it in the last minute?  Any opinions or suggestions will be apreciated.  Thank you.

Comments(19)

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William Johnson
Retired - La Jolla, CA
Retired
Regretfully the Tenant. They agreed to allow it be shown but you didn't mention specifically about Open Houses. I have heard of an agreement that seller will pay them cash of $150 for the 3 hour Open House if they would like it. They would usually take the money. This is set up in advance in writing . When the money is paid, a contract has been formed. If they take the money and do not provide access then ostensibly they have committed fraud and are subject to the eviction process. Check with legal council in your state and municipality and brokerage before ever attempting this.
Sep 08, 2007 07:14 PM
William Johnson
Retired - La Jolla, CA
Retired
PS, not a credit on the rent.
Sep 08, 2007 07:14 PM
Hayden Gerson
HPM Financial LLC - San Diego, CA
You should never have a open house on a tenant occupied property, it is not fair to the tenant as well as typically not on the lease.
Sep 08, 2007 07:25 PM
Donna Oehler
Realty Executives Platinum - Palmdale, CA
A.V. Foreclosure Specialist
I do not like holding open houses on a tenant occupied property unless the tenant is a relative. It seems that when they are around they seem to tell all prospective buyers all the flaws of the property.
Sep 08, 2007 08:36 PM
Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
Luxury service in Central Maryland
Surely this depends on the tenant and the relationship with the landlord?
Sep 08, 2007 10:22 PM
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
I had a home listed that had tenants and for open houses they would go away and take their dogs with them but for showings they did not leave and would tell people how glad they were that they could stay in the home until xxx. They were on a month to month.   
Sep 08, 2007 10:26 PM
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY
I believe the tenants should not be present. This would help to avoid any comments being made by the tenants.
Sep 08, 2007 11:45 PM
Charlottesville Solutions
Charlottesville Solutions - Charlottesville, VA
Hands down the tenants should go! How many times have you seen buyers and sellers start to talk and just cringe?
Sep 08, 2007 11:59 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL

It isn't good to have tenants around during showings...as they always seem to point out all the negatives of the property...but if it is so bad...why are they still living there?

 

Sep 09, 2007 12:07 AM
Simon Conway
Orlando Area Real Estate Services - Orlando, FL
Tenants should be as far away as possible during showings, but I don't think you should ever hold an open house in a tenanted property. The risks to your seller (accusations of theft etc) are huge.
Sep 09, 2007 12:36 AM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"
GO!!!!   I have never had a good experience with a tenant was in a home...I had one property I was not gettting any showings, I could not figure out what was going on, come to find the tenant had the storm door locked so agents could not get to the lock box....tell them to gooooo
Sep 09, 2007 12:40 AM
Nicole Garner
Not Available - Tigard, OR

This was the seller's choice to have the property marketed to sell the property. I have had experience with showing a property that was tenant occupied... It was not a very good chowing. First on all when I was told to call, the tenant said oh well I am going to be going somewhere so you can't come by. I thought well that would have been a perfect time, anyway I rescheduled. So when my clients and I went to tour the property, to my surprise there were not only one person but three there why I was showing the property. They didn't want us to go into numerous rooms, they had the doors shut, they kept cursing and saying things right in front of my clients that were very inappropriate (did I mention-my clients have a toddler also). I just could not believe this. Needless to say my clients had to pass on that house.

So personally I think the tenants should go. They live there and obviously do not want the seller to sell the home, even thought they agreed on it. I hope you and the seller the best of luck!! 

Sep 09, 2007 02:22 AM
Rolo Cuadrado
Colorado Mountain College - Frisco, CO
I would NEVER want tenants present when showing, or during an open house. Good specific showing instructions that work for the tenant are important. If the tenants are really uncooperative, then William's suggestion to pay them is an option that might work. 
Sep 09, 2007 04:47 AM
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Real Estate Specialist

I have a tenant incentive program. When I list a home that is occupied by a tenant, I meet with the tenant to  get any concerns they have out in the open, to come up with fair showing instructions and to explain the showing process. I give them a reward certificate for a $200 gift card if the property gets a valid offer within 30 days, $100 for an offer within 60 days, and $50 if it sells after 60 days. This motivates them to be cooperative in the selling process (absent at showings, allow open houses etc...). When it's time for them to move out, I ask for a new mailing address to send the certificate to. I then mail the certificate along with a "thank you" card to their new address and input the new address into my prospecting list. With a relationship already established, when it's time for the tenant to buy real estate, who do you think they'll call?

Sandy

Sep 09, 2007 06:18 AM
Sherry Armstrong
RE/MAX Property Centre - Ormond Beach, FL
Daytona Beach FL real estate
I like Sandy's idea about a tenant incentive program but the liability to the seller is huge! Here in Florida, we have a lot of rented,investor owned properties! I like the the idea of an incentive program but sometimes it's not manageable. We have an investor who is losing about 12-15 properties and showing houses owned by him is a nightmare! Where did he find those renters???
Sep 09, 2007 03:44 PM
Thavisak Lucky Syphanthong
Lucky Star Realty - Crescent City, CA

Wow!  Thank you everyone for commenting on this topic.  Apparantly, there are two sides to this, one is that there is a chance that tenants' belongings could be missing and they would blame it on us the realtors, and the other is that if the tenants were present during showings or open houses, then they would likely make comments to our buyers about negative things affecting the property. 

Well I guess in the end, it would depend on the tenants, their relationship with the sellers, the realtors, and how comfortable they are with us showing the property if they are not there. 

By the way, the tenants that live in my seller's listings all agreed to have realtor showings and open houses in their rental contracts, these houses were vacant when we listed them and the tenants knew that they were up for sale.  So who is right then?  Does the seller have the right to show the property for showings and open houses, as long as they give tenants 24hrs notice and the tenants have to comply no matter what?  Thanks again for the comments!:)

Sep 10, 2007 07:08 AM
Greg Wilson
1st Cornerstone Realty - Schaumburg, IL
I think the tenent shouldn't be present.
Sep 10, 2007 02:44 PM
Sherry Armstrong
RE/MAX Property Centre - Ormond Beach, FL
Daytona Beach FL real estate
When I show a property that has a tenant present and the buyer is an ivestor who would like the property already rented, I have found that informing the buyer that this buyer would want them to stay changes their attitude a bit. Of course, it the buyer wants to move in, I don't say too much. We have so many listing that are vacant, it's fairly easy to show a buyer who'll occupy plenty of houses that are vacant to avoid the renter situation.
Sep 10, 2007 03:34 PM
June Mellor
Century 21 All Islands - Kailua, HI

I prefer that tenants nor sellers (if the home is owner occupied) are home during a showing or open house.

Tenants most likely are not thrilled with the possibility of needing to find another home in the near future and for sellers, sometimes they can share a nice story of their future plans and end of giving the other side some bargaining power (i.e. - sharing that they have a short timeframe and need to move soon, or that they are divorcing and just want to get rid of the home, etc.) - you never know what may be said that can weaken your negotiating position.

Just my 2 cents...

Aloha from Hawaii!

June Mellor

Sep 11, 2007 10:08 PM