When Listing to Rent and Sell Goes Wrong

By
Real Estate Agent with Berkshire Hathaway Home Services McNelis Group Properties

When Listing to Rent and Sell Goes Wrong - For many it is important to see immediate return and therefore the decision is made to list a property to rent and to sell - whichever comes first. However, there can be pitfalls that I feel are important to mention.

While it is certainly the prerogative of a homeowner to rent, sell - whatever - the decision should be considered carefully. Possibly there is no choice financially for the seller. However, if the financial consideration is not eminent, it just might not be in their best interest to put potential buyers in a position to be competing with a tenant for a property.

Sellers should consider the message to the ever elusive serious buyer when they look at a home for purchase and are essentially competing with potential tenants for a property. It just might not sit well with a buyer to be qualified and willing to commit to buying a home and racing the clock with a potential tenant.

An additional thing to think about -  possibly alienating agents. Sellers are trying to woo agents to show their home for purchase, the problem being to  potentially discourage agents who are already showing dozens of properties to a buyer from showing to buyers knowing the lease is an initial away. And then, a year later when the lease is completed, and the home goes on the market for sale and for rent and the agent recognizes the property - that agent that was competing last year just my not be too likely to put hours into showings and putting an offer together to potentially be shut out again - by a tenant.

And on the flip side, if a seller would actually be happier leasing the property, it can backfire when seeking a tenant. For the potential tenant who may really need to find a rental as soon as possible it can be extremely frustrating to be put on hold if there is potential serious buyer in the mix. When a property is listed for sale and for rent it can send the message to a tenant that they will get thrown under the car for a buyer when the seller actually may prefer to have a tenant for their particular situation.

There certainly are circumstances where there is a need to try to obtain a buyer or tenant if there will be serious financial implications, but there are also considerations with "whichever comes first" that need to be weighed carefully when deciding to do this when the financial consequences are not as serious.

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Comments (3)

Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I do not take properties to manage where the owner wants to continue to attempt to market the home FOR SALE.

Most GOOD rental prospects say NEXT when they see a FOR SALE sign on a property being offered for lease.  Our MLS rental section is almost entirely populated with UNsold listings and the renting public knows that they will have to deal with these homes going back on the market in the next year or two and they are asking for LONG TERM LEASES NOW!

Aug 14, 2011 06:46 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Wallace, in our market we see many listings for sale and for rent. I also try not to list for sale and for rent, particularly out of the gate due to time and expense of properly marketing a property for sale. However, the rental market is hot here - so hot that I constantly receive calls asking to rent properties that are listed for sale. Due to there being a base in the immediate area, we actually get good rental prospects for higher end properties because they will be in the area for two years, but not probably not longer, so long term leases are seen often. So the quality of the prospects is not really as much of an issue as putting qualified buyers and tenants in competition with another in some situations.

Aug 14, 2011 07:04 AM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Susan, I hate it when owners want to do this!  It really does confuse the transaction. 

Aug 16, 2011 11:18 AM