Turnkey Real Estate Management Detroit | How to Sell Your Tenant-Occupied House


Trying to sell a house that currently has a tenant living in it can be tricky.

Here are some tips that might help it go a little smoother for you.

Related: How to Make Your House Standout In the Detroit House Market

Turnkey Real Estate Management Detroit - for sale sign

Is it Worth It?

Your first step should be to decide whether you really want to try to sell the house with a tenant already in it.

Weigh the pros and cons of selling the house with the tenant in it, versus getting rid of the tenant.

Related: “How Do I Sell My House Fast in Detroit,” You Ask?  Here’s How.


Which option is best depends on you and your specific situation.

Most sellers want to keep the tenant in there, so they can keep those rental checks coming in as long as possible.

Don’t get me wrong; I understand this way of thinking.

But if you feel this way, you really need to think hard about whether those few months of rent checks are worth the trouble of trying to sell with a tenant in the property.

Related: 14 Ways to Get Better Tenants in Your Rental Homes in Detroit MI



So let’s say that you had a tenant paying $800 a month in rent, and that right now, with the house in it’s current condition, you could sell that house for about $20,000.

Well, if you got rid of the tenant, and were able to spruce up the house a little bit inside and out, you might be able to get $28,000 for that same house.

In my opinion, it depends on how bad you need the rent money.

You can always make prospects make an offer before they're allowed to see the inside of the house.
You can always make prospects make an offer before they’re allowed to see the inside of the house.

I say that, because it would take about ten months of rent money to make up for the difference in sales price between what you can get today, and what you could get if it was fixed-up a little.


Check the Laws

You might want to check the laws in the county where your property sits before putting together your strategy on how you’re going to deal with this situation.

In some places, the tenant has the right of first refusal when the house they’re living in goes on the market. And not only that, they can shoot down the offer you get on your house, too!

Don’t believe me? Google “maryland tenant right of first refusal” when you get a chance.


Make Prospects Make Offers Without Seeing the Interior

One thing you can do (if you absolutely have to sell with the tenant in there), is make the prospective buyer make an offer on the property before they can even see the interior.

You can word the purchase agreement so that the prospective buyer would have the ability to back out of the deal if they don’t like what they see on the inside later during their inspection.

Nevertheless, it’s an option, but it’s not one I suggest, per se.

What’s Good About this Approach

With this approach, you get to cut down on the amount of times you have to deal with the tenant as far as letting somebody in the house to check it out.

It can also filter out the tire-kickers.

See, only the people that are really serious about potentially buying the house are going to fill out a purchase agreement (usually).

Even if they can back out later.
What’s Bad About this Approach

If you go this route, you’re going to lose out on some prospects who aren’t going to want to place an offer without seeing the inside, even though they can back out later.

This arrangement just seems to turn some people away for whatever reason.

Evicting a tenant can help you sell your house faster, but it's not necessarily a simple plan to execute.  (Image: Editor B/Flickr)
Evicting a tenant can help you sell your house faster, but it’s not necessarily a simple plan to execute. (Image: Editor B/Flickr)



This can be tough to do, and understandably so.

After all, it can be hard to voluntarily give up that monthly rental income until the house is sold (hopefully).

Besides, you can’t always just up and evict a tenant for no reason, so this can be a toughie.

Ultimately, it depends on the landlord/tenant laws in your jurisdiction, in-conjunction with what’s written-into your lease.

In these situations, you just have to weigh your options.

But if you have tenants that aren’t that cooperative with letting people in to see the property, you might want to consider this one.

Note: From my experience, evicting a tenant is usually only necessary if you’re selling the house to someone who’s going to buy the house at retail value.

This is because retail buyers expect the house to be in move-in condition, which your home probably isn’t if you have a tenant in it.


Be Honest with Your Tenant

The high road may not be the most comfortable one to take, but it can be the most beneficial one in the long run.

I’ve seen it work first-hand.

A landlord was selling us his property, and he just flat-out told the tenant that he was selling the house.

He went on to tell the tenant they may not have to move, if the buyer, who’s a landlord as well, chose to keep them in the unit.

He assured them that they wouldn’t be put out on the street if the house sold, and that they’d have 45 days to move after the home closed if the new owner didn’t want them as tenants.

He finally told them that they’d be given a three-day notice when someone was coming to view the house.

I was shocked at how cooperative the tenant was.

After talking more with the landlord, I found out that they had a pretty good landlord-tenant relationship, so I’m sure that helped.

Paying your tenant a little cash to cooperate with showing your property can make things go a little smoother.  (Image: quaziefoto/Flickr)
Paying your tenant a little cash to cooperate with showing your property can make things go a little smoother. (Image: quaziefoto/Flickr)


Make a Cash Offer to the Tenant

Everybody likes extra cash.

I’ve never had to do it, but I’ve heard landlords talk about paying their tenants $10 to $20 for each time they allow someone to view the house.

The tenant may not be happy about showing the house, but an extra $10 gas money might at least soften the blow a little bit.

If you don’t want to pay them each time you show someone the house, you can offer the tenant some cash when the house closes with the new buyer.


Gift Certificate

You can also offer them a gift certificate of some kind to show the house. Or some cash if or when the house closes.

I’ve read about landlords offering to pay for their tenant’s moving truck fees, too, so that’s an option too.

Alright, enough’s enough.  My hands are hurting from all of this typing.

Catch me on part two for… well, part two.  Later.

How did you navigate those testy waters of selling with a tenant in the house?  Leave a comment.

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