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Tips for Selling Tenant Occupied Homes in Natomas
Very few tenants are happy to hear the lease won’t be renewed in Natomas.
If a Sacramento Realtor in Natomas knows her neighborhood, she can often guess how quickly that home will sell. I have noticed that certain neighborhoods are taking their own shapes and directions now that the housing bubble has popped in Natomas, and I have gained a sense of why some homes in Natomas might take longer to sell or whether they will fly off the market. But even though I might know instinctively how a transaction will progress, it is still not an excuse not to be completely prepared for the market. As I continually say, half of the hard work is done in advance to listing a home.
For example, let’s talk about a home in Natomas that closed yesterday. These particular sellers called me around the middle of July to talk about selling a home, which was presently occupied by a tenant and managed by an excellent property manager I’ve done business with in the past. The thing about tenants is you never know which way it will go, they will either cooperate or they won’t. But when you are working with a top-notch property manager, the property management company will send the correct legal paperwork to the tenant to explain the process, and that often gets the tenant on board.
So does being nice to the tenant and making her beds. Hey, I do what I have to do. She left me a key under a pot in the back yard, which I promptly confiscated. All of the beds were a mess. She knew I would be taking photos, but you’ve got to remember that tenants don’t always care about the listing agent’s objectives when they are suddenly notified their lease won’t be renewed and, oh, btw, that means you have 30 days to find somewhere else to move. They have other pressing matters on their minds, like where their children will go to school and whether they will find another roof over their heads in our super tight rental market in Sacramento. I get it. Tenants don’t care what we agents have to do when selling rental homes in Sacramento.
Without grumbling, I made the beds. Picked up the house, straightened out the bathroom towels, put the load of laundry on the floor so I could shoot the cabinets in the laundry room. To get to this point, took me about a month. A month of work I don’t get paid for until it closes.
We went on the market August 21. I could write a book about how to sell a home in one day, even though it really takes a month or more. On August 22nd, we received a cash offer for less than list price. Why is it cash buyers tend to think their offer is stronger because it is cash? It can close faster, but it is not necessarily stronger. I’ve had transactions in which the cash buyers suddenly developed severe needs elsewhere for the cash and they canceled. I sent the offer to the seller and suggested they counter back at list price. Come on, 24 hours on the market and the buyer can’t offer list?
The buyer agreed to pay list price. This is what a seller gets with a full-service Realtor. We also made the sale AS IS. Those sellers who sometimes pass by the more experienced agents in favor of a discount agent who will charge less have no idea how much money they are losing in their transaction due to limited vision; they just don’t know any better. I made sure we had no drama in this transaction. We closed a month later. No repairs, no concessions, the tenant moved out of the home in Natomas on time. Happy sellers.
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.
Selling a Home With a PITA Tenant in Sacramento
A reasonable person would conclude that it’s kinda stupid to turn into a PITA tenant when your landlord is selling your home and you need a future reference, but the odds of running into a reasonable person under these circumstances is kinda slim. I’ve met some wonderfully cooperative tenants in my real estate career but those were primarily the guys I plied with alcohol. There were also a few tenants I didn’t have to bribe, who were kind, considerate and all around super nice people but somebody has probably killed them by now or they moved to Alaska.
I encountered a PITA tenant recently in Fair Oaks. I called to make an appointment to view the home and take photographs because the seller is hiring me to sell his home. It was previously in MLS but did not sell for a variety of reasons, one of which I suspect involved tenant sabotage. I say this because when I called, the tenant was immediately defensive and combative. She argued intensely with me about the photographs, which are owned by the previous agent. She felt they were beautiful — featuring a hamster cage in the middle of the living room floor — and rattled on about how she knows what good real estate photographs are supposed to look like. She carried on like she shot them herself, and maybe she did.
After much complaining by the tenant, I was able to set an appointment for next week. Due to the tenant’s combativeness — to be on the safe side and comply with CA Civil Code 1954a, which gives sellers or their agents the right to show a property for sale with 24 hours notice — I prepared a written Notice of Entry. However, the tenant turned into a screaming lunatic when presented with the document. She has no way to legally refuse entry but my California real estate license does not include going into the home packing heat. Unfortunately, that seller, with a balloon payment looming, now can’t sell his home due to the tenant. The poor guy will probably be forced into short sale territory after the PITA tenant eventually vacates.
I have another home in Lincoln coming up for sale next week. We’ve been trying for several months to list the home for sale but the tenant has refused to cooperate. These tenants are doctors, too. Just goes to show that medical physicians are not exempt from being a PITA tenant. They don’t care about receiving a good recommendation because they are closing a home and no longer need to rent. Their attitude is screw the landlord. They don’t care. Sue ’em. They can afford a judgment.
Sugar and honey doesn’t always work.
That’s the thing about being a busy Sacramento real estate agent. We get an up-close and personal view of the underbelly of society: the PITA tenants. The best way to sell a tenant-occupied home in Sacramento is when it is vacant. Sacramento homes for sale that are vacant are a) easier to show b) show better, and c) they also tend to bring top dollar, which often more than makes up for the vacancy factor.
Working With Tenants To Sell a Rental Home in Sacramento
Not every tenant ends up being a nightmare or terrible problem when selling a rental home in the Sacramento region. In fact, some tenants can be a huge blessing in disguise. I often prefer to have tenants in the home if at all possible for several reasons. First, I don’t worry nearly as much about vandalism when the when I’m selling a rental home is that occupied. Second, having furniture in the marketing photos makes the home seem more alive and it shows better.
Sure, you hear horror stories about tenants who refuse to move upon sale or those who believe the world revolves around them and the out-and-out jerks. These types can cause problems by lying about the condition of the home to prospective buyers, refusing to show the property at the times they promised and not picking up after themselves when buyers do come through. As a Sacramento real estate agent, I’ve dealt with uncooperative tenants of rental homes who bolted the door from the inside, turned the pit bulls loose and then slipped a note under the door threatening physical bodily harm if agents entered.
Fortunately, most of the tenants I work with are very accommodating. Part of that reason is because I treat them with respect. It might be my Sacramento listing and the seller’s property, but the house is the tenant’s home. I am grateful when a tenant grants me the privilege of entrance so I can take photographs of the interior, and I verbally share that sentiment. I say please and thank you. I acknowledge graciousness. And I go to great lengths to protect the tenant’s privacy.
See, I think when you deal with other people the way you would like to be treated, they generally respond in kind. If a real estate agent starts out on the wrong foot, making false assumptions and behaving as though she is at odds, on the opposite side of the fence, tenants might not want to cooperate. They might even retaliate.
I often ask sellers to give the tenants a small financial incentive to cooperate with showings. After all, what’s in it for the tenant? Tenants are generally inconvenienced, they don’t stand to make any profit when the home is sold, and let’s face it, some real estate agents can be very pushy. You know it and I know it. I try to save the tenants from that kind of obtrusive and sometimes abrasive invasion.
Just being nice to people can go a long ways. There is no reason, even in the face of adversity and unwarranted criticism, to act otherwise. If you want to sell a rental home in Sacramento, call Elizabeth Weintraub at 916.233.6759.
Getting Ready to Sell a Tenant-Occupied Home
If a client needs me to tell a short-sale bank to #*%$-off, I have no problem doing so. I can be as tough as the next guy, and probably much more decisive. In a moment’s flash, I can size up the situation, analyze it, choose the appropriate reaction and, bam, just do it. But decide whether to carry an umbrella when it’s sprinkling outside, no can do. It’s a struggle. It’s more than a matter of take the umbrella or leave it, in Sacramento, it’s do I open the umbrella or do I wait until I am soaked?
There is a fine line between being a wimpy wasp or a tough-as-nails Sacramentan, I’ve noticed. For one thing, it’s perfectly OK to stick a travel-sized umbrella in your bag if it’s rainy weather. It’s another thing if you’ve got to stick your hand out to determine whether it is actually raining hard enough to open the umbrella. That’s why you see so many suited guys downtown running in the rain, umbrella clutched under their arm and a newspaper over their head. They don’t want to look like a wimp. They’d rather look ridiculous.
Kind of like I looked, standing on the steps yesterday and holding a clipboard over my head when it was raining. Yes, I had an umbrella in my bag but it seemed pointless to open it. I had not expected the tenant to lock the gate between the house and the street, but fortunately there was a doorbell right there on the wall, and fortunately, she quickly came out to let me inside.
This Sacramento real estate agent was inspecting two houses on a lot in Midtown that will most likely come on the market this week or next, depending on whether I rouse the sellers from cruising the beaches on vacation in Maui. When I first called one of the tenants, she was very reluctant to let me visit. Why, she needed more than a few hours of notice, and she hadn’t cleaned the house. She didn’t know if she would be home, no, probably, she would not be home, and she wasn’t sure when she ever would be home, if I wanted to know the truth.
I assured her it was OK. I would visit the house next door. Oh, and did I mention that most likely an investor would buy the property, so she could probably just stay on as a tenant if she so desired. I let her know that when I finished inspecting the home next door, I would stop by, and if she was home, that would be cool, and if she wasn’t, that would be OK, too. I’d just catch her some other time down the road.
After I completed my initial agent inspection and shot photos of the first house, I walked over to the second house and knocked. Oh, my goodness. She was home. Imagine that. Somedays, I’m just lucky like that.
