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Should I sell to my tenants?

Crofton Real Estate Q & A

Q.  I rented my home when I relocated across country, but now I’m thinking of selling it to my tenants.  How can I tell if they’re serious about buying?

A.  Funny you should ask about this, since I wrote a blog on this topic for the Maryland Real Estate Blog earlier this week:

Are Your Tenants Serious About Buying Your Home?

You rented your home a few years ago, but now you’re interested in selling it.   Selling a tenant-occupied property has challenges, however, because you must rely on your tenant to keep it show-ready both inside and out (de-cluttered, clean, etc.) and to provide access to prospective buyers.  This co-operation is critical to selling the property.

When you mention “selling” to your tenants, they may express an interest in buying the property.  You’ll probably think, “Wow, that’s too easy to be true!”

In my experience, it IS too easy to be true.

I can’t tell you how many times sellers have contacted me about handling the sale of their home and told me they already have buyers – their tenants.  Unfortunately, tenants rarely purchase the home they occupy; an arm’s length transaction is much more likely.

Food for thought:

  • If your tenants are qualified to purchase a home, they’d probably already own one.
  • If your tenants truly wanted to own a home, chances are they would not be renting now.
  • If your tenants do make an offer on your property, it’s likely they will offer less than fair market value (you know… because this sale will be so “easy”…).

One way to find out if your tenants are serious about purchasing your property is to offer them ten days to submit a written offer prior to marketing the property to other prospective buyers.  This is ample time for them to get pre-approved for a loan and to prepare an offer with their own agent.

If they do submit an offer during that time-frame, your REALTOR® will advise you during each step of the sale to your tenant and advocate for your best interests in negotiations.   Once this reserved period passes, however, you and your agent will know that it’s time to focus on selling your property to someone else, without looking back.

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