How and When to Talk with Tenants When You’re Selling

It's never easy to deliver bad news, and letting a tenant know you plan to sell is probably bad news for them. You've undoubtedly been a communicative, caring landlord, so why stop now? Whether your tenant rents an investment property or a space within your own-occupied home, he or she is an important partner in the selling process. So here are a few things to keep in mind.

Breaking the news

Your first instinct may be to write them an e-mail, but you might want to rethink that. To show you care, it's best to give your tenant a call or schedule an appointment to talk person. Being respectful of their feelings and professional in your demeanor can set the stage for a successful end to your business relationship.

Consider timing

Giving your tenant plenty of notice about your plans will help ease the blow of having to move. The worst thing you could do is to have your tenant find a 'For Sale' sign in the yard when they come home from work. You want to make sure your renter has plenty of time to find a new place to live. Lay out your timeline and assure them that you'll keep them in the loop as the process moves forward. Later, when you accept an offer, make sure to share the closing date so your renter has a deadline for moving.

Discuss access

Your tenant will deal with all of the annoyances of selling, including getting the home ready for an open house. Ideally, your lease has a provision that allows you to show the home if and when you decide to put it on the market. Bring a copy of the lease to your tenant meeting.

You or your agent should give the renter as much notice as possible of any buyer walkthroughs. Ask your tenant which days and times work best for them, and try to accommodate their schedules. To thank them for any inconvenience, consider taking a percentage off the rent or provide a cleaning service. Some landlords offer to pay a fee for each showing, give a bonus for leaving the property in great condition, or return the security deposit to help cover moving costs.

Help them move on

If they've been a good tenant, offer to write a letter of recommendation, which can help them set themselves apart from other applicants. The letter should include how long they’ve rented from you, if they paid their rent on time, if they were hassle-free and how well they cared for the place. Make sure to include your contact information if the next landlord has questions. A letter that says this person is the best tenant ever can make all the difference as landlords and property managers sift through mountains of applicants.

Adjust your plans

If your tenant reacts badly and gets angry about your decision to sell, it might be best to give notice according to your lease, and wait to list until he or she moves out. An uncooperative tenant may sabotage your sales efforts by not keeping the home clean or dissing the place at house showings.