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The Downside to Selling Sacramento Rental Homes
Being tenants in a single-family home is no guarantee for the tenants that many Sacramento rental homes will remain a forever home for a family, especially if the tenancy is month-to-month. Often, when leases expire they are not renewed. If not renewed, the rental agreements then revert to month-to-month tenancy, and with that comes the possibility that the tenant could be booted out in the event of sale. Sure, the tenant gets 60 days notice by the owner but it doesn’t change the fact the tenant has to relocate. Most tenants, though, will move sooner.
Still, while I’m standing in these Sacramento rentals homes as the owner’s designated Sacramento Realtor, preparing my Agent Visual Inspection and getting ready to shoot photographs, I can sense the tenant’s trepidation. I try to reassure the tenant there is always the possibility that an investor will buy the home and allow the tenant to remain in tenancy, but they still fret. They worry that the new owner will raise their rent. It’s a disturbing place to be when you’re a tenant.
I don’t really know why some tenants rent instead of buying, especially in this particular market when generally the rental payments are higher than what it would cost to pay a mortgage, but everybody has their reasons. Some people are not cut out to buy a home. Some don’t possess the credit ratios. Others, I suppose, just don’t want the hassle of repairs / maintenance and their lives could be in flux, settling down for a long time is not always an option.
What my experience over the past four decades has taught me about selling Sacramento rental homes is there are no definetes and guesses can be wrong. For example, I recall a closing on a rental home in Natomas. When I toured it, I thought for certain an investor would probably buy it because the neighborhood was not conducive to owner occupants: most of the homes in that particular area were rentals. Yet, an owner occupant did buy the home, and the tenants were booted. They had lived there for about 4 years.
In another rental property in south Sacramento, I imagined a first-time home buyer would buy it because the price was so completely affordable, but that’s not what happened. Actually, an investor bought it. Then, when I had placed an investment property, a couple of homes in East Sacramento into escrow, that buyer is an investor buying in part for a family member. It’s often a mix of things. But one thing remains, and that is the tenant is affected, no matter how you look at it. The tenants in East Sacramento are moving out because they’re tired of disruptions and showing the property.
Every situation is different. I encountered tenants in a home in Lincoln a while back who were opposed to showing the home at all. Even with receiving 24-hours’ notice, they decided their right to quiet enjoyment was disrupted and they refused to show, so the owners had to evict them. After the eviction, the owners discovered the tenants had poured Castor Oil all over the carpeting and further damaged the interior. These guys were doctors who had bought a million-dollar home — profession and wealth is no measuring stick that you’ve got good tenants. I suggested the owners call their insurance company and put in a claim. As a result, the insurance company paid for the repairs and is pursuing those evil people for repayment.
Whatever the situation with tenants, I will help a seller to move that rental property and obtain the highest price. It’s just what I do. Call Elizabeth Weintraub at 916.233.6759.
How it Can Take a Year to Sell Rental Homes in Midtown
Hiring a top Midtown agent is the fastest way to sell rental homes in Midtown.
Once upon a time in a faraway land called the Sacramento Pocket, I sold a rental home that was tenant occupied, and the tenant was extremely cooperative about showings, the home was immaculate, and it sold at top of the market. If I had any children that would have produced grandchildren, this is the bedtime story I would tell them because it is true — yet unbelievable because it so rarely happens. Still, it doesn’t stop me from selling rental homes where tenants reside.
I explain to my sellers that they could be losing a lot of money by leaving tenants in the home while the home is for sale. I know my voice often falls on deaf ears because sellers are more concerned about making the mortgage payment from the tenant’s rental payments, which is understandable. They worry that it could sit vacant forever, which of course it won’t, and they’ll go bankrupt making payments with nothing coming in to offset. Nope, it’s easier for them to leave the tenant in place, even though it might cost them more in the long run.
Take, for example, the effort I recently expended to sell rental homes in Midtown Sacramento — two homes on one lot — which closed last week. After my first inspection, I had initially suggested to the seller that he should evict the tenants, but when he refused, well, nature took its course. First, it’s no picnic to have agents calling and knocking on your door and, in this hot seller’s market in Sacramento, that’s what happens. One tenant was so upset with the showings that she put a sign on her door warning visitors in a threatening manner, let’s just say, to stay away. The other grew tired of the constant parade of buyers kicking her stuff all over the floor.
During the first four months of trying to sell these rental homes in Midtown, the only types of offers we received were lowballs, reflective of the way the home showed with occupants, and we just stopped showing the back house. Four months of open houses, blasting the listing everywhere online, tweaking the photographs, begging agents at my Midtown office to show the home, and fielding calls from prospective buyers — some doing yoga in McKinley Park, others driving by, the bulk scouting homes online — nada.
Then, lo and behold, the dark clouds lifted, the skies opened up, and the tenants abruptly moved out. Almost immediately, we received a full-price offer from a qualified buyer. Unfortunately, that buyer walked away after inspections: older homes often have issues that can frighten the unsuspecting. But within a few days, we received another full-price offer from a qualified buyer who closed escrow with minimum negotiations because we conditioned the sale.
In retrospect, the seller had listed with a cheaper agent last year, a family friend, he had explained. We had talked a year ago but he wanted to “save” 1% of the commission (typical wrong thinking), so he listed with her. Nothing happened during her 5 1/2 months of the listing, I heard. That’s when he hired this veteran, full-service Midtown agent. I imagine he regretted later not following my advice in the beginning and not hiring me to start with, but he’s also grateful I performed. No matter how long it takes, I do not abandon my sellers, and I make it work. Most sales today are not easy.
A Land Park Agent Says Leave the Tenant in the Home for Sale
One of the really good things about a Land Park agent like me listing a home in Land Park is that I am very close and available in case of emergencies. We had one such emergency last night. An agent called me to say a brand new lockbox was flashing red and behaving badly. I dropped what I was doing, backed into the recycling can with my car because my husband left it in the driveway in an attempt to dissuade garbage pickers from tearing it apart, and dashed over to my listing to give that lockbox a good talking to.
Turns out it was as I had anticipated, and there was something wrong with the buyer’s agent’s display key. It would not read the lockbox. It was also dark, so she could been putting in the wrong code or even pointing at the wrong spot on the lockbox. Whatever the problem was, I was glad to be there to solve it. Doubly glad I live nearby. Why, if that seller had listed with some other agent who didn’t live in Land Park and was not a Land Park agent that home might not have been shown last night.
I always drop what I’m doing to take care of more important matters. Of course, if I was in the middle of driving somebody to the hospital, I probably would let my phone ring through to voice mail, but otherwise I tend to try to answer it.
I have another home to list in Land Park shortly. I’m going over today to meet with the owners and do a walkthrough to help them decide how to stage the home. Staging is so crucially important. For my other listing, I suggested to the seller that he go on the market immediately rather than wait for the tenant to move in a couple of weeks. That is contrary to most general advice, but then every real estate listing is different. In this particular listing, the tenant has the home decorated and staged beautifully, that it will look more empty and lonely without her stuff in it than it does now.
It’s rare that I ever suggest that a tenant stay in the home. But every so often, a tenant’s touch is so magical, it makes a world of difference. If you’re looking for a top producer Land Park agent, call Elizabeth Weintraub at 916.233.6759.
