Want to know more about selling a house with tenants?

Selling a house with tenants was the subject of an email I received last week from expat Kiwi James, living in Sweden.

As an absentee vendor or landlord, the thought of selling a house with tenants can bring up all sorts of scenarios, good and bad.

As James is on a tight timeline, selling a house with tenants was going to be the best option for him, but in my return email I also pointed out the reasons why selling his rental property without tenants might be the better option.

Personally, I always like the path of least resistance, and prefer to market properties vacant and staged, because it’s easier to make improvements to the property before going to market, creating higher perceived value and access is available 24/7.

However, that’s a perfect world, and sometimes this option is just not available.

Often, selling a house with tenants is the only feasible option.


Selling A House With Tenants

The following is pretty much the exact email I wrote, but I thought the information it contained may also be useful to others as food for thought for other folks thinking about selling a house with tenants, or without.

“Hi James …

Selling a house with tenants can often end in disappointment.

Selling without tenants is always my preferred option, as it’s the path of least resistance.

I know it’s not your preferred option, but please let me explain why …

From the moment the tenants leave, we’ll have full access to the property and be able to spend as much time that is needed to get all the decorating and maintenance jobs that need doing, inside and out, done.

Taking the time to make the property as likeable as possible, or give it as much street appeal as possible ALWAYS translates into a greater sale price. This includes any redecorating which I HIGHLY recommend before going to the open market.

By the way, I’ll always recommend staging in a vacant home, whether redecorated or not.

This adds a LOT of perceived value to the property, and gives the property WOW factor in images and video. I am more than happy to manage this process for you, and have previously done so before, for out-of-town clients.

Please check their testimonials at the bottom of this email.

If you decided to engage me to sell your property today WITHOUT tenants, we would have to give the tenants 90 days’ notice, if they’re on a periodic tenancy. Plus an additional 3 days to mail a hard copy notice to vacate. If they’re on a fixed term contract, they have the right to stay until their contract is up, or you could offer them a fee to break their contract and move on.


Selling A House With Tenants NZ

Sometimes this works.

When given notice to vacate, tenants often leave earlier than waiting out the whole 90 days. Somewhere between 30 to 60 days is normal.

Then we need anywhere from 2 to 4 weeks to redecorate, stage and create a marketing campaign to promote the property.

Auction is, by far and away still the best option for selling in Auckland, unless you have a property with good development potential, then we should consider Tender, but that’s another story.

A normal marketing campaign takes just under 4 weeks, assuming the property sells under the hammer at Auction. Nearly 80% of all Auction properties that don’t sell under the hammer on Auction Day, are sold within the following two weeks.

All up, you’re looking at a worst-case scenario of potentially about 5 months, if the tenants decided to wait out their full 93 days. If they left after a month, the full timeline could be about 3 months, but no guarantees.

Here’s the info on selling a house with tenants.


Tenants Rights When Selling A Rental Property NZ

With the sale of a house, tenants do NOT have to grant access to the property when we want access. 

This can put some buyers off. When buyers are hot, they want action, and sometimes waiting doesn’t work for them.

Visits to the property with buyers should be negotiated before going on the market, however, they cannot unreasonably withhold access either, but they may make things difficult.

Honestly, we are 100% at the mercy of sitting tenants.

Sometimes they are fantastic, sometimes they are not.

What I have noticed when selling a house with tenants, is tenant’s patience can run thin, fairly quickly. It starts out great, until they realise there’s quite an interruption into their otherwise peaceful lives. Some folks are ok with it … while some get a little shirty.

If I’m to market and sell a tenanted property, I make it my mission to make sure tenants are treated like gold. I schedule a meeting to talk about the potential invasion into their lives, and what they can expect from me as an agent. I will also tell them I will do my best to be as non-invasive into their lives as possible.

Minimal impact on tenant’s lives means minimal trouble.

They’ll have my contact details, and I’ll let them know they can call me 24/7 if they have an issue with ANYTHING. I let them know a successful outcome always includes their continued happiness.

Tenants can be a potential barrier between you, my client, and a successful result. My job is to make that barrier a non-existent. Sometimes it all runs smoothly, and sometimes it does not. Sometimes tenants have bad days just like any of us, often through no fault of their own, but this can translate into bad moods, and a complete shut-down of communication, and access to the property.

On the other hand, I find a gift, or rent holiday given to tenants AFTER the property has sold, can be a marvelous incentive to keep lines of communication and access to the property, open.

Another thing. We can’t ask a tenant to tidy the house. Or clean it. If they live in a clutter, or the bathroom is messy, or they haven’t vacuumed in a while, then we have to put up with this. We have no right to ask them to do anything about this.

Can this have an impact of the selling price of the home?

You bet.

The best presented homes out-sell the poorly presented homes on price, and time spent on the market, nearly every time.

Selling a house with tenants, I think, is a risky proposition.

There’s also a chance we may not realise the full sale price potential. What’s to stop a savvy investor who sees your home as a chance to make a quick buck because the home is poorly presented, untidy, unclean and access intermittent?

All they’d have to do is move the tenants out, redecorate the home, tidy up the grounds and put it back on the market to potentially make a quick $50k in 4 to 5 months.

Well, not on my watch James.

Remove the tenants, and you remove the risk.

Selling a house with tenants can be as easy as A-B-C or it can be a nightmare filled with drama.

Here are two testimonials from out-of-town clients who put their trust in me to sell their rental properties. Tina’s was tenanted. Carmen and Jim’s wasn’t. Happy to pass on their contact details for personal references if you’d like.

Cheers, Tim

Here are two testimonials along campaign videos created for each property. As I said, Tina was selling a house with tenants, Jim and Carmen were not.

“Selling a house with tenants from another country is never easy but Tim Webb of Barfoot and
Thompson was an absolute life saver.

From the moment that I decided to sell my Albany property Tim was busy making all the arrangements in regard to marketing, sales requirements and open homes.

Tim’s approach to selling real estate is easy and relaxed, and believe it or not it was fun – we had plenty of laughs along the way.

I could not recommend Tim enough to anybody looking to sell a property.  Now that I have sold mine, I will definitely engage Tim again when I decide to buy something else.”

Tina Powell – Melboune, Australia

This property sold under the hammer on Auction Day. 


“Tim is more than just a real estate agent. When it comes to selling your house, he’s your absolute best friend. No kidding, the man pulls out more stops than an Adam Gilchrist highlights reel. If there’s a more positive man on the planet I haven’t met him and nothing, I repeat nothing is a problem too large or too small.

For us, living in the South Island, we were nervous about how we would sell our Auckland home without physically being there. So many jobs to get done at the property to get her ready for sale and a lot of tidying up to do after some messy tenants had left the place in a state. Tim took over and we just sat back and watched while tradesman were hired, gardeners were put to work, cleaners were brought in, neighbours were kept in the loop and all manner of neighbourhood kids, dogs & cats were treated to a joke, a smile, or a pat.

The end result was so amazing we even wished we could move back in ourselves!

Tim takes an enormous amount of pride in his work and is absolutely out to do the best job he can in order to maximise the market potential of your property. He has an extensive network of people he can call on to get any type of job done from professional tradespeople for last minute renovations, through to celebrity cricketers to help with promotional videos.

We could not recommend Tim more highly to help you buy or sell a property.

You will really enjoy the process and one of the best things you will take away is that you have met a thoroughly decent human being.”

Carmen & Jim Boyden – Nelson, South Island

This property sold by Pre-Auction Offer, and went on to sell $30k over reserve. Here is the video I created for this campaign.