How to sell a tenanted property

by Readers Question

8:58 AM, 12th January 2021
About A week ago

How to sell a tenanted property

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How to sell a tenanted property

I have only one property, which is tenanted, and I am thinking about selling it, but I am not sure the best way to do this.

I would like to sell it with the tenants in situ mainly because they have been good tenants and I want to avoid eviction.

I have contacted a few online companies, but they only want to give me 85% of the property value, which I obviously do not want to do.

Just wondered from other landlord’s experiences how you sold properties, please? Did you just use a regular estate agent? Are there any specialist agencies you would recommend?

Many thanks.

Clair


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Comments

John Mac

10:10 AM, 12th January 2021
About A week ago

Auction by Modern Method (Buyer pays fees)

Chris Harris

16:08 PM, 12th January 2021
About A week ago

We have done a number of these over the past two or three years. We used a traditional estate agent ( who also happened to be our letting agent). This dual role helped smooth the process as in addition to the sales commission and many prior years of rental commissions, they were looking to retain the property under new ownership.

Solicitors will be a pain in the butt, as usual, but overall not much harder than selling with vacant possession. There will likely be a modest discount to open market value, in our case around 5%, but the upside is you have no voids.

TrevL

22:18 PM, 12th January 2021
About A week ago

Clearly not an easy time to sell a house, tenanted or not, but note the resistance you might meet from the current Tennant.

Depending on their vulnerability to covid, you may be asking them the accept viewers entering they're home in the middle of a pandemic.

Have you considered a balanced incentive for them to find somewhere else, making it a lot easier to sell, untenanted.

Kim Karpeta

16:00 PM, 13th January 2021
About A week ago

There are landlords out there who are happy to buy property with tenants in situ. Some landlords prefer this and also we find that new potential landlords like the comfort of an existing tenant. Chris pointed out that some solicitors can make it more complicated that it has to be so it is needs to be so it is important to have the right solicitor and agent. You are welcome to contact me if you would like free advice.

Whiteskifreak Surrey

19:49 PM, 13th January 2021
About A week ago

We bought two tenanted properties and had no problems. Only once with a landlord who wanted to cheat us re deposit, but being experienced we did not fall for that. We bought at the average price in the area at that time.
Now we want to sell one tenanted property, excellent tenants, always with payment on time, so we do not want them to become homeless... things do turn around...

Whiteskifreak Surrey

19:51 PM, 13th January 2021
About A week ago

Reply to the comment left by TrevL at 12/01/2021 - 22:18
TrevL - if I may ask, what do you mean by a balanced incentive? Thanks.

TrevL

22:14 PM, 14th January 2021
About 6 days ago

Reply to the comment left by Whiteskifreak Surrey at 13/01/2021 - 19:51
Well, although there may be plenty of landlords in the area that would be keen to take a property with a sitting Tennant (as Kim pointed out), there may not be, or they may be looking to pay a lower price as they know there will be less competition for the property. On top of this the Tennant may not be happy about exposing themselves to covid risk if viewings are requested ( and could rightly refuse access).

The alternative is selling the property with vacant possession, which would obviously increase potential buyers to both landlords and owner occupiers which may yeild a higher price.

Of course, the minimum eviction notice currently (unless things have change - I can't keep up) is 6 months. Not nowing how quickly the op is looking to achieve the sale, an incentive to the Tennant could facilitate a quicker vacation.

David Coughlin

8:16 AM, 16th January 2021
About 5 days ago

Hi Clair, (and thanks Neil for a plug)

In my experience you will get the best price if you sell the property vacant and fix it up before selling with the best local agent over a 3-6 month timescale.

However, if you have to sell with a tenant in place, or need to sell it quickly (eg tax deadlines/bills or for other reasons), then you need to choose wisely.

Most local agents will ONLY market to other landlords who will usually offer less then owner-occupiers, whereas we have found that we can achieve higher prices from landlords by putting landlords and owner-occupiers in competition with each other to drive up their offers. In the end we get the best prices from both owner-occupiers and from landlords and we work hard at getting the best deal for the landlord and a win-win for the tenant.

For example, if the owner-occupier offers £120K and a landlord £110K - you have £10K extra and you could offer the tenant £203K to leave voluntarily and end their tenancy sooner than the current S21 notice (via a Deed of Surrender) - leaving you £7-8K better off.

We do this all the time. However, we secure the sale with the buyer first by taking a deposit so it does not leave the landlord at risk of being out of pocket.

Finally, the purpose of marketing tenanted sales to landlords and owner-occupiers is that the best offer from a landlord might have been just £100K and the higher bids from owner-occupiers pushed landlords' bids up to £110K (the whole point of the auction) - and estate agents simply do not engage this strategy - we do.

If you would like a free valuation and any help, I would be very happy to get one of my team to look at it for you.

Chris Harris

8:45 AM, 16th January 2021
About 5 days ago

If nay one knows where a deal like this might be available, please let me know. "you could offer the tenant £203K to leave voluntarily ' 🙂

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