Selling your house can be stressful, but how do you sell a house if you have tenants already in place? Here are five steps for selling your house with tenants in Minneapolis St Paul.
Step #1: Ask the Tenants
The first step to selling your house with tenants in Minneapolis St Paul is to notify the tenants the property will be listed for sale. The first response from many of them may be fear that you are kicking them out, and that is a surprising truth about being a landlord. Assure them that, kicking them out is not your intent, but wanted to give them first dibs on buying the property. If the tenants have been living in your place for a few years, they might have fallen in love with the property, have great friends next door, or enjoy the school district for their children. Without asking them, you might not know that they were thinking about buying a permanent home for themselves. Often property owners don’t talk personal with tenants, and they might have been working on their credit, saving up a down payment while making all your payments for rent on time. This would be an excellent opportunity for the tenants to buy the house they have been renting and know they love. If they are interested and their first home purchase, you may need to help them. If they have not gotten in with a lender, let them know some lenders that you may have worked within the past. Have them get prequalified for a loan on your property, and the purchase process could be nice and smooth. If they have had a couple of hiccups in the past credit-wise, and can not get a traditional loan today, you may want to offer an owner financing deal. With owner financing, you become the lender and sell your home by yourself for a stated amount of time that you all agree with. This owner financing may also be ideal if they have a great payment history as a tenant, and you can continue to look forward to monthly payments unless you need the lump sum of cash now.
The side benefit of selling your property to your tenant with owner financing is that you often get over the market rate for the interest of their mortgage. Make sure in terms of the purchase agreement, and you have everything spelled out clear. The terms should include the amount of the loan, the length of the loan, and if there is a balloon payment in the future. What the interest rate is, and the downpayment amount that is given. That would be a great start to the contract. We at Minnesota Cash Home Buyers have helped people put together a deal for sellers and tenants who would like to buy the home they are living in if you would like our service give us a call (612) 444-5088.
Step #2: Review Your Lease
The next step to selling your house with tenants in Minneapolis St Paul is to review the lease you have in place with the current tenants. Most Minnesota leases will have some clause about what will happen if the property sells while a tenant is still living in the house. In a lot of cases, when the property sells, the tenant has a specific time frame to vacate the property, usually about 30 or 60 days. Your tenants may or may not be able to locate new housing at the time of the sale. The worst thing that could happen is that you are ready to sell, and your tenants don’t move out, and they stay. In Minnesota some statues define what you are to do in the situation. In Minneapolis, you would need to go to the county courthouse and evict them, which may take a month from start to finish and cost you hundreds of dollars. So the earlier you are thinking about selling, the better to inform your tenants, especially if you are really serious about listing right away. If your property is in a hot market, the house may sell quicker than you think, and the tenants may not make it out in time.
A proactive landlord will go through a process while selling their property with a tenant living in it. They will inform tenants and start guiding them to what needs to be done, so they are out when the property is sold. That might mean as the landlord, you help the tenant find a place to live and make sure everything is moving along smoothly towards the sale.
Step #3: Wait for Expiration
One of the least complicated steps for selling your house with tenants in Minneapolis St Paul would be to let the current lease expire and do not renew it. Make sure to understand all the things you have in your lease. It may go directly into a month to month situation, or they may have to be out and gone when the rental lease is up. You may want to accept month to month payments still to cover your expenses or mortgage payment if you still owe on the property, but you would have to make it crystal clear to the tenants that if they have the move out clause in their lease, they would have to vacate the property before its sold. Having the tenant leave at the end of the lease without accepting month-to-month payments may leave you carrying the property’s cost on your own until it sells. The good news is that the tenant is gone at the end of the lease, and that will bring some relief to the buyers.
Step #4: List with Tenants in Place
If you are unable to wait for the lease to expire, the next step for selling your house with tenants in Minneapolis St Paul would be to list the home with tenants in place. This may work to your advantage if you have a good relationship with then, especially if the tenants agree to leave during house showings. It’s always a bit of a challenge selling a property with a tenant in it. By Minnesota law, you have to give a tenant 24-hour notice to do a showing. Many buyers see the property for sale and want to view it asap. On the other hand, the tenants may be upset that the house is being sold; they might not want to move and can cause problems when the house is being shown. Be prepared that they may also cause damage to the property when they leave, especially if they leave on bad terms.
We have seen tenants who are so upset that their apartment of the house was sold, that even though they were great tenants up to this point, not they are breaking things and causing all kinds of problems.
Step #5: Pay the Tenant
The fifth step for selling your house with tenants in Minneapolis St Paul would be to offer payment for them to vacate the property. Some landlords really hate this idea, but in reality, it goes a long way to help the whole situation go better. It does not have to be a considerable amount, even giving them $100 or $200 to help smooth over any uncomfortable house showings or move into their new home. You could also pay them by offering a discounted rental rate for that last month of rent, a low cost to spend if you are able to sell you house fast.
How You Can Avoid These 5 Steps!
If you need to sell a house with tenants in Minneapolis St Paul, the fastest, easiest, and most convenient way is to sell the home to a direct home buyer. This will eliminate most property showings, dealing with upset tenants, and the costs of putting it on the MLS with an agent.