sell

How to Sell a Tenant-Occupied Listing - Kevin Ward

hey there it's Kevin I got a great

question here from one of my coaching

members actually what should I do when a

property is occupied tenant occupied and

the owner is interested in selling the

property problem is it's occupied by a

tenant can't be staged and the owner is

interested in selling but if it doesn't

sell they would continue renting out to

the same tenants when I asked him about

his motivation he said it is hi it's an

expired listing so what do you do when

you have a tenant occupied property and

the people want to sell the property so

number one it's an expired listing the

most important thing always always

always forever is motivation why do they

want to sell how high is his motivation

he says it's high well high is relative

right i high how high is your motivation

to make a million dollars well it's high

well how high are you willing to do

whatever it takes or is that just a big

wish so first thing you got to decide a

decipher or determine is how strong is

the motivation why they want to sell

what I'm going to do with the money are

they are they making money on the

property are they losing money are they

breaking even do they have other plans

for the equity is there equity all of

those are important questions so the

first thing is do they want to sell or

not if they want to sell they can sell

so let's say they're motivated to sell

so here's the challenge with a tenant

occupied property more than anything

else the problem is it's occupied by

somebody who's probably not interested

in it selling this is somebody who lives

there and if it doesn't sell he's

they're going to keep renting it to the

same tenants which means the tenants

probably don't want to move so when the

tenants live there and you show the

property that tenants aren't really

interested in being cooperative so the

real key is if you got motivated sellers

and they want to sell is you have to

work with the tenants directly and treat

them with the same level of respect as

if they are the owner you literally have

to do that so let's just say that

sellers definitely motivated sell they

want to sell they list it so here's how

you do it

you have the seller obviously has to

give notice

to the tenant but I'm going to be the

one that controls setting up showings

and all of that kind of stuff so first

educate and kind of instruct your to

your seller how to make an arrangement

with the tenant to do this get the

tenants cooperation how do you get the

tenants cooperation well by

incentivizing them with a rebate on

their rent at closing now here's how it

goes that the seller requests that the

tenant and the tenant buy unless the

leases sum out written weird otherwise

the tenant has to cooperate they have to

allow the property to be shown typically

and so forth so this the landlord the

seller has to give notice to the tenant

then the tenant supposed to cooperate

the tenants don't really cooperate they

may not be there but they don't make up

their beds they don't clean the kitchen

it's a mess it stinks there's a dog

whatever it is so what needs to happen

is the seller agrees to reimburse or to

rebate the tenant for a portion of the

commission so let's just say it's $1,000

a month rent and they agree at closing

forth from the time the property is

listed until it is no longer showing

however long that is they're going to

rebate them 30% 40% 50% of the rent at

closing now you don't you don't you

never you the seller should never tell

the tenant well while it's on the market

you only have to pay me $700 a month in

rent because then the seller the tenants

going to pay $700 rent and the place is

still going to be ugly so it has to be

an incentive and it's a rebate based on

this one

that this the tenant gives a with with a

one-hour notice the tenant cannot deny a

showing under any circumstances between

you know 9:00 a.m. and 6:00 p.m. or 7:00

p.m. depending on the time of year and

what the norm is in your market they

cannot deny a showing and they must keep

the kitchen the sink empty of dirty

dishes the sink must the kitchen must be

clean house must be clean beds must be

made no animals in the house

when there's a showing that's got to be

the case if the feedback comes back from

an agent that the property didn't what

the property was a mess or the tenant

was in this asleep in the bed or

somebody was watching television or

whatever like that then there's no

rebate or that nega have a conversation

now that's the leverage your job is now

to have a conversation with the tenant

to say look I know the pain in the net

for you and I talk to them I say so at

first as you know the sellers are in the

process of selling property they've

hired me to help but I also know it's

where you live and so I really want to

be respectful of you and I want to I

want to work directly with you to make

this as smooth and easy for you as

possible if you treat the tenant like

they're the enemy like they're a

nuisance or they're a problem they're

going to be a nuisance and a problem but

if you treat them with respect and with

dignity as if they are they are a major

player in the success of this

transaction and you collaborate with

them then they're going to be more

likely to be respectful and cooperative

so you got to treat them with that

respects they look so here's what we

need to do is we've got to set up the

way the best way for showings to happen

so that the house shows well and that

you guys are able to know it's come in

and be prepared and have you not beat

yet so that nobody's here because the

house nobody needs to be here when this

when buyers come when the house is shown

so we need to set that up and I can do

either a 30-minute notice or a one-hour

notice which should be better for you

one hour notice okay perfect and what

only it's only going to show between

like nine nine o'clock in the morning

and six o'clock in the evening or seven

or whatever and that's and that's

totally legit is totally fair if there's

a pet you got to do with the pet and ask

them how they're going to you know take

care of the pet if there's a showing and

so forth the key is number one seller

motivation number two getting the tenant

cooperation and you have to understand a

tenant occupied property tends to not

show as well so intends to not sell as

well now there's one exception and that

is the property is a great rental

property and it could sell for as much

to an investor who would keep it as a

rental property in that case you just

need the house to look good and the

tenant can stay and so forth

the other one other thing really

important find out by talking to the

tenant are you once you get the listing

why don't you guys buy the property and

there's a lot of times they they are

like you know we thought about it we've

talked about it I don't know if we can

qualify whatever lent to it let me hook

let me hook you up with my lender let's

have a conversation let's just take a

look and see what it would take for you

guys to be able to own this property and

then you you wouldn't have to move and

you would own it so every month you'd be

paying yourself and building equity

rather than paying somebody else and

there's a lot of situations where the

tenant will actually end up being the

buyer you just double into the

transaction so use common sense be

respectful of everybody

straightforward conversations tell the

truth and stay on top of everything and

if the sellers are motivated and you

work well with the tenants it'll always

work