- - Thursday, January 12, 2012

The first piece of advice many Realtors give homeowners who want to sell their home while a tenant is in residence is short and not-so-sweet: Don’t do it.

Though there are always exceptions, renters rarely are eager to help homeowners market their home.

Any experienced home seller can share the frustration of selling a property while living in it - trying to keep it immaculate and always available for buyers to visit. But at least home sellers have a financial motivation to put up with the inconvenience. Renters, especially if they are not eager to move, have no motivation other than kindness to keep the home pristine and open to a constant stream of prospective buyers.

Realtors themselves are sometimes reluctant to show homes that have a tenant in place because of the potential for coming up against an uncooperative tenant. Some Realtors say a home with a tenant will sell for a little less than a home that is unoccupied or has the owner in residence.

Though it may seem that the simple answer would be to wait until a lease has ended and the home is vacant before putting it on the market, reality is not so easy. First, many homeowners need the rental income to pay the mortgage on the property, so their preference is to keep the home rented until the last possible day. Second, particularly in the District, there are rules about ending a tenant-landlord relationship.

“In D.C., tenants have the ‘right of first refusal’ when the home goes on the market and when the first offer is received,” said Dale House, director of Coldwell Banker Property Management for the Mid-Atlantic Region.

“There’s no notification process, either, that allows the homeowner to evict the tenant as long as they pay their rent,” he said. “The only option is that an owner may move back into a property with 90 days notice. If the owner is not moving back in and just wants to sell the home, then they have to negotiate with the tenant.”

Mr. House said the rules are easier on landlords in Virginia and Maryland, typically requiring 30 or 60 days notice to the tenants that they will need to move.

“It’s pretty common in this market to be selling a home with a tenant in it,” said Chris Hager, a Realtor with Long & Foster Real Estate in North Bethesda. “There are lots of reluctant landlords out there who opted to rent their property rather than sell it, and now they want to put it on the market.

“There’s the potential for conflict between the tenant and the landlord, especially if it was not made clear to the tenant from the beginning that the owners wanted to sell,” Mr. Hager said.

Mr. House said landlords need to be honest with their tenants and communicate clearly.

“Don’t be sneaky,” Mr. House said. “The very worst problem is if you try to sneak the property on the market and sell it before telling the tenants.”

Nick Pasquini, broker-owner of Century 21 Redwood Realty in the District, Arlington and Ashburn, Va., said selling a home with tenants in it only works well if the homeowner can get the tenants’ cooperation.

“Eight out of 10 times, the tenant will say OK, they will cooperate, but when the house needs to be shown to prospective buyers, it is dirty or the tenants won’t let the agent in,” Mr. Pasquini said. “This is particularly true if the place is on the market for a couple of months, because even the most cooperative tenant will be sick of keeping the place perfect all the time and sick of leaving when buyers want to see the property.”

Mr. Pasquini suggested the homeowners consider giving a concession on the rent for keeping the place in good condition.

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