Selling a house can be a daunting task, but it can become even more complicated when tenants are already occupying the property. If you find yourself in this situation and want to sell your house in Southwest Michigan, here are five steps that you can follow:
Step #1: Ask the Tenants
If you’re looking to sell your house in Southwest Michigan while tenants are still occupying the property, the first step is to inform them that the property will be put up for sale. It’s also worth asking if they’re interested in purchasing the property themselves, especially if they’ve lived there for a few years and have grown attached to the home, neighborhood, and school district. This can be a great opportunity for them to buy the property they already love.
In case the tenants are interested in buying, you should encourage them to qualify for a loan on the property, which can make the purchase process smooth and easy. However, if they’re unable to qualify for a traditional loan, you might want to consider offering an owner financing deal. This could be particularly beneficial if the tenants have a strong payment history and you’re not in a rush to receive a lump sum of cash. You can continue receiving monthly payments from them instead.
Step #2: Review Your Lease
If you’re planning to sell your house in Southwest Michigan while your tenants are still occupying the property, the first step is to carefully review the lease agreement you have in place with them. Most leases will contain a clause outlining what happens if the property is sold.
Typically, the lease will stipulate that the tenant has a certain amount of time to vacate the property after the sale, usually around 30 days. However, it’s important to keep in mind that your tenants may not be able to find a new place to live within that timeframe.
Therefore, if you’re serious about selling your property, it’s best to inform your tenants as early as possible, especially if you’re planning to list it for sale soon. In a hot market, your property may sell faster than expected, which could leave your tenants scrambling to find new housing.
Step #3: Wait for Expiration
One relatively simple approach to selling your house with tenants in Southwest Michigan is to allow the current lease to expire without renewing it. While you may still accept month-to-month rent payments to cover your expenses or mortgage payments, it’s important to make it clear to your tenants that they would need to vacate the property if their lease includes a move-out clause.
However, if you opt to let the lease expire without accepting month-to-month payments, you may end up bearing the cost of the property until it sells. So it’s worth considering the financial implications of this approach before deciding if it’s the right choice for you.
Step #4: List with Tenants in Place
If you’re unable to wait for the lease to expire, the next step for selling your house with tenants in Southwest Michigan is to list the property with the tenants still in place. This approach could work to your advantage, especially if the tenants agree to leave during showings, as it would allow you to showcase a staged home. However, it’s important to consider the potential downsides as well.
For example, the tenants may not be happy about the sale and could cause problems during showings, particularly if there’s a history of conflict between you and the tenant. Additionally, when they move out, there’s a risk that they could cause damage to the property, especially if the relationship ends on bad terms. So it’s important to be prepared for these possibilities and consider them carefully before listing your property with tenants in place.
Step #5: Pay the Tenant
The fifth step in selling your house with tenants in Southwest Michigan is to consider offering payment to your tenants to vacate the property. This can help ease any potential discomfort during house showings and assist them in moving into a new home. Offering a discounted rental rate can also be a viable option to incentivize the tenants to vacate the property.
How You Can Avoid These 5 Steps!
If you’re in a hurry to sell a house with tenants in Southwest Michigan, the quickest, easiest, and most convenient solution is to sell the property to a direct buyer. By doing so, you can avoid the hassle of organizing property showings, managing potentially upset tenants, and dealing with the costs associated with listing the house on the MLS.