Can You Sell an Occupied House with Tenants?

Selling a rental property can be a complex process for Oklahoma City investors, and it becomes even more challenging when there are tenants living in the property. As a landlord, you have a legal and ethical obligation to respect your tenants’ rights while also ensuring a smooth sale. While it is your investment, it is also their home, which means communication and proper planning are key to a successful transaction.

How To Sell an Occupied House with Tenants

Selling a house with tenants can be a challenging process. It requires careful planning, communication, and cooperation to ensure that the rights of both the landlord and the tenants are protected. 

Notify Your Tenants

Open and honest communication with your tenants can prevent misunderstandings and potential issues down the line. Notify them as soon as you decide to sell, and explain what they can expect during the process. This includes discussing showing schedules, potential buyer visits, and whether they need to vacate or if the new owner will assume their lease. Providing incentives, such as discounted rent or moving assistance, may help ease their concerns and encourage cooperation.

Prepare Your Property for Sale

Once you have notified your tenants, it’s time to start preparing your property for sale. This can include cleaning, repairs, and staging your property. You want to ensure that your property is presented in the best possible light to potential buyers.

If your tenants are still living in the property, it’s vital to respect their privacy and their living space. You should work with them to schedule times for cleaning, repairs, and staging that work for their schedules. You should also be mindful of any changes that may impact their living arrangements, such as scheduling showings during their work hours or interrupting their daily routines.

Work with Your Tenants

When selling a rental property with tenants, it’s crucial to work with them throughout the process. This means being flexible and accommodating when necessary. For example, if your tenants are not comfortable with strangers coming into their homes, you may need to limit the number of showings or schedule them at times when your tenants are not at home.

You should also be prepared to answer any questions or concerns your tenants may have about the selling process. They may be worried about their security deposit, the terms of their lease, or their future housing arrangements. It’s important to address these concerns promptly and honestly to maintain a good relationship with your tenants.

Different Types of Leases

If you’re a landlord looking to sell your occupied rental property in Oklahoma City, you have a few options available to you depending on the type of lease your tenants are holding. 

Tenants with Fixed Term-Leases

A fixed-term lease is a lease agreement that has a specific end date, usually six months or a year from the start of the lease. If you’re a landlord with tenants on a fixed-term lease, you have two options when it comes to selling your property.

1. Wait Until the Lease is Up to Sell

One option is to wait until the lease is up to sell the property. This is the simplest and most straightforward option, as it allows you to sell the property without disrupting your tenants’ lives. You’ll also need to make sure that you’re following the terms of your lease agreement, which may have specific provisions regarding the sale of the property.

2. List with Tenants in Place

Another option is to list the property with tenants in place. This can be a more challenging option, as it requires you to work with your tenants to ensure that the property is presentable and that showings are scheduled at convenient times. However, it can also be a more attractive option for potential buyers, as it allows them to see the property as it is currently being used. If you choose to list the property with tenants in place, it’s important to communicate with your tenants throughout the process and to be respectful of their privacy and living space. You’ll need to give your tenants ample notice before you put the property on the market. And most states require landlords to give tenants at least 24 hours notice before showing the property to potential buyers. 

One thing to keep in mind is that if you do choose to sell the property with tenants in place, you may need to offer an incentive to your tenants to ensure their cooperation. For example, you could offer a rent reduction or a cash bonus for keeping the property clean and tidy during the selling process.

3. Sell Directly to a Cash Home Buyer

If you’re looking to sell your Oklahoma City property quickly and want to avoid the hassle of listing it on the market or waiting for a lease to end, selling directly to a cash home buyer could be a great option. Cash home buyers are real estate investors who specialize in fast transactions and can provide a cash payment for your property, often closing in just a few weeks or even days. This makes it an appealing choice for landlords who want to offload a rental property without going through the traditional selling process.
However, it’s important to keep in mind that you may not get the same price for your property when selling to a cash home buyer as you would if you listed it on the open market. Traditional buyers, especially owner-occupants, may be willing to pay more, particularly if the home is in great condition. However, listing your property comes with added costs, including agent commissions, repairs, staging, and marketing. Selling on the open market can also take months, during which you’ll continue paying taxes, maintenance, and other holding costs.
Cash home buyers, on the other hand, purchase properties as-is, meaning you don’t need to worry about repairs or upgrades. Many cash buyers also cover closing costs, making the transaction even more cost-effective. Additionally, if your property is occupied, a cash buyer may be willing to take over the lease with tenants in place, allowing for a seamless transition and eliminating the need for evictions or negotiations.
Selling to a cash buyer can be especially beneficial if you need to sell quickly due to financial reasons, relocation, or simply not wanting to manage tenants anymore. While the cash offer may be lower than a retail sale, the speed, convenience, and savings on commissions and repairs can make it a worthwhile option.
If you’re a landlord looking to sell your rental property in Oklahoma City without the hassle, working with a reputable cash buyer can provide you with a straightforward, stress-free solution.

Tenants with Month to Month Leases

A month-to-month lease is a lease agreement that automatically renews each month. If you’re a landlord with tenants on a month-to-month lease, you have a few options when it comes to selling your property.

1. Renegotiate

One option is to renegotiate the lease agreement with your tenants. For example, you could offer your tenants a new lease agreement with a longer term, such as six months or a year. This would give you more time to sell the property without disrupting your tenants’ lives. It would also give your tenants more security, as they would have a longer-term lease agreement.

However, it’s important to keep in mind that your tenants may not be willing to sign a new lease agreement. They may prefer the flexibility of a month-to-month lease, and forcing them to sign a longer-term lease could cause tension in your landlord-tenant relationship.

2. Terminate

Another option is to terminate the lease agreement with your tenants. This can be a more challenging option, as it requires you to give your tenants notice that you’re terminating the lease agreement. Most states require landlords to give tenants at least 30 days’ notice before terminating a month-to-month lease.

However, if you’re looking to sell the property quickly and don’t want to deal with the hassle of working with tenants, terminating the lease agreement may be your best option. Once the lease agreement is terminated, you can sell the property without worrying about disrupting your tenants’ lives or following the terms of a lease agreement.

What do You do if Your Tenants Don’t Want to Leave?

As a Oklahoma City landlord, you may find yourself in a situation where you want to sell your rental property, but your tenants don’t want to leave. This can be stressful, but there are options available to help homeowners in this situation.

Sell to the Tenant

One option available to you is to sell the property to your tenant. This can be a win-win situation for both you and your tenant. Your tenant may be interested in purchasing the property because they are already familiar with it and have established roots in the community. They may also be willing to pay a higher price for the property because they won’t have to move out and find a new place to live, which can be a major inconvenience for them.
If your tenant expresses interest in purchasing the property, you should first consult with a real estate attorney to ensure that the transaction is legal and that all necessary paperwork and disclosures are completed. A real estate attorney will help ensure the sale is compliant with local laws and regulations, protecting both parties involved. You should also have the property appraised to determine its current market value, and then negotiate a fair price with your tenant. An appraisal ensures that you’re both on the same page regarding the home’s value, and it can help avoid any misunderstandings during the negotiation process.
Another important factor to consider is financing. If your tenant is unable to secure financing from a traditional lender, you may need to explore the option of owner financing. This is when the seller (you) provides financing to the buyer (your tenant), allowing them to make payments directly to you instead of obtaining a loan from a bank or other financial institution. Owner financing can be a great way to make the sale happen if your tenant is struggling with traditional financing, but it does come with risks and requires careful consideration of the terms and payment schedules.
Selling to your tenant can be a great solution if they are interested and able to purchase the property. However, it’s important to keep in mind that not all tenants will be interested or financially capable of buying the property. If your tenant isn’t able to proceed with the purchase, you may need to explore other options, such as selling to a cash buyer or listing the property on the market. Regardless of the outcome, being transparent and communicating clearly with your tenant throughout the process will ensure that both parties are satisfied.

Sell to an Investor

Another option available to you is to sell the property to a Oklahoma City investor. Investors are often interested in purchasing rental properties because they are already generating income and have established tenants in place. These investors may also be willing to pay a fair price for the property because they see the potential for future income and are familiar with managing rental properties. Selling to an investor can be a fast and straightforward way to sell, especially if you want to avoid the complexities of dealing with owner-occupants or making repairs to the property.
If you choose to sell to an investor, it’s important to first consult with a real estate agent who can help you find a qualified investor interested in purchasing rental properties. Real estate agents with experience working with investors will have connections to buyers who are actively seeking income-producing properties. You should also have the property appraised to determine its current market value. Knowing the value will help ensure that you negotiate a fair price with the investor, based on the income the property generates, its condition, and other relevant factors.
One potential downside to selling to an investor is that they may not be interested in keeping your tenants in place. Many investors purchase properties with the intent to renovate and flip them or bring in their own tenants to increase the rental income. In these cases, you’ll need to give your tenants proper notice that their lease will not be renewed, and they will need to find a new place to live. Depending on the situation and your local landlord-tenant laws, this notice could range from a 30-day to a 60-day requirement. Clear and early communication with your tenants about the sale and the upcoming changes will help ensure the process runs smoothly and minimize any conflicts.
Selling to an investor can be an excellent option if you’re looking for a quick sale or if your property is in need of repairs that an investor is willing to take on. However, it’s crucial to weigh the pros and cons, including the potential disruption to your tenants, and proceed with open communication to make the transaction as seamless as possible for everyone involved.

Paying Your Tenant to Leave

If your tenant doesn’t want to purchase the property and you’re unable to find an investor who is interested in keeping your tenants in place, you may need to consider paying your tenant to leave. This can be a difficult decision, but it may be necessary if you want to sell the property quickly and without any legal complications.

If you choose to pay your tenant to leave, you should first consult with a real estate attorney to ensure that the transaction is legal and that all necessary paperwork and disclosures are completed. You should also negotiate a fair price with your tenant and have them sign a release of liability agreement to protect yourself from any legal action in the future.

One potential downside to paying your tenant to leave is that it can be expensive. You may need to offer a significant amount of money to incentivize your tenant to leave. However, if you’re unable to find another solution, paying your tenant to leave may be the best option for everyone involved.

What to Do If Your Tenants Are Causing Trouble

It is one thing not to want to leave but quite another to cause trouble for the property owner. As a landlord, you’ll know that one of the most challenging situations you may face is dealing with difficult tenants. These tenants may have been problematic in the past, but they can present a whole new set of challenges if you inform them of your intent to sell.
In these situations, you may want to enlist some outside help. You can work with an agent who understands how to handle difficult tenants, hire a property manager to mediate between you and the tenants, reach out to a real estate lawyer for advice, or enlist the help of North Gate Equity to buy the house quickly. A real estate professional experienced in working with difficult tenants can help streamline communication and ensure that the sale proceeds smoothly.
If your tenants are causing problems, a real estate attorney can help you navigate legal matters. They can assist with negotiations to resolve any disputes, ensuring that any legal issues are addressed before the sale of your property. Additionally, an attorney can help you draft lease agreements that protect your rights as a landlord and ensure that you comply with local laws when dealing with tenants during the sale process.
Another option is hiring a property manager. A property manager can act as a buffer between you and the tenants, managing their expectations, handling any disputes, and ensuring that the property remains in good condition. This allows you to focus on the sale without having to get involved in ongoing tenant issues.
Selling to an investor could also be a solution if you have tenants who are unwilling to cooperate. Many investors are familiar with managing tenant-occupied properties and may be willing to purchase the property with tenants still in place. If your tenants are resistant to leaving, an investor may be more inclined to handle the transition, making the process easier for both parties.
Alternatively, you could offer your tenant an incentive to leave voluntarily. While this may not always be an option, paying a tenant to vacate the property can be a quicker and more peaceful solution. Offering a moving stipend or covering moving costs could be enough to motivate them to leave, allowing you to sell the property without any further delays.
Dealing with difficult tenants when you want to sell your rental property can be a challenging situation. However, there are options available to you, including hiring a property manager, working with a real estate agent and attorney, selling to an investor, or paying your tenant to leave. Before making any decisions, it’s important to consult with professionals who can help you navigate legal issues and ensure that you’re making a legal and informed decision. By following these tips, you can ensure that the selling process goes as smoothly as possible while also protecting the rights of both the landlord and the tenants.