We are sometimes approached by buyers who wish to sell a property that is occupied by tenants. Sometimes the aim is to sell the property as an investment, with the tenants remaining in occupation, and sometimes the aim is to sell with vacant possession. In either instance there are some issues of which potential sellers should be aware and it is vital that they choose an estate agent that is also conscious of the issues that arise in marketing a tenanted property.
One of the first things to consider, if you are thinking of selling a tenanted property, is the state of the property on a day to day basis. It is vital that, when potential buyers visit the property, it is shown to its best advantage. If you are in frequent contact with your tenants, you are probably in a good position to know what the current state of the property is. However, if for example you use a letting agent to manage the property, and have no direct contact with the tenants, it is worth your while to arrange an inspection visit to the property to ensure that it is in a marketable state. We would caution against leaving this visit to the letting agents – it is always best for you to have a first hand view of the state of the property.
In our view it is very important that a seller be open with any tenants as to his or her plans to sell the property. In practical terms it is impossible to keep tenants in the dark and early discussions with them outlining your plans can smooth the way for marketing the property. If the aim is to sell the property with vacant possession then it is very important that you have carefully reviewed your tenancy agreement to determine when vacant possession can realistically be achieved and what notices need to be served on the tenants to achieve this. If you have problems with the tenants, or if they react badly to the news that you are proposing to sell the property, it is usually best to serve notice on them to vacate and only market the property once it is vacant.
Any agent you choose to market your property should give thought to, and explain to you, how they will deal with the tenants during each stage of the marketing. The aim is to ensure that the best possible photographs of the property can be taken and that some ground rules for viewings are agreed. At No-Flies we are conscious that tenants view the property as their home and we seek to take every possible step to limit the disruption that tenants face during marketing, whilst at the same time doing the best possible job for our client the seller. In an ideal world the seller should be able to leave everything to us as estate agents. However, if, as is sometimes the case, problems arise with tenants being unreasonable about allowing viewings or keeping the property reasonably tidy for viewings, we obviously contact our client to inform him or her of the issues and seek to work out with them a practical way forward.
We are very conscious that you, as seller, have a business relationship with your tenants and we therefore also aim to build a positive relationship with them. Key to this is communication. We always agree with tenants a procedure for arranging viewings and will never take people to view the property without informing the tenants in advance. If viewings are cancelled we always aim to contact the tenant to let them know so that they do not waste time tidying or vacate the property for a viewing that never takes place. Our aim is to limit the disruption to, or encroachment on the privacy of, tenants that viewings entail. One of the ways in which we have found it possible to do this is to concentrate viewings on a particular day or days. We have had great success in organising “open days” (for more information click here) which assist in keeping disruption for the tenants, and the need to tidy and clean the property, to a minimum whilst at the same time accelerating the marketing process for the seller.
In summary, selling a tenanted property can sometimes be more problematic than selling a vacant, or owner occupied, property. However, this need not always be the case and the key factors to a successful sale are:
- communication with the tenants (both by the owner and by the estate agent);
- treating the tenants with courtesy and respect;
- some creative thinking by the agent on how to market the property; and
- the agent agreeing some ground rules with the tenant and, most importantly, sticking to those rules.