A tenant occupied property limits the buyer's perspective on the quality of the home, restricts their access to the property, and reduces the flexibility of settlement. Each limiting factor will deter certain buyers from touring the home or making an offer. The math is simple: Fewer Buyers Tours = Less Offers = Lower Price.
Condition A tenant living in your property has control over how the property looks and feels. Typically, it may be cluttered, under-furnished, or poorly decorated, meaning it doesn't showcase its best appearance. The house might be messy, smelly, or generally unappealing. All of these factors can deter buyers from offering the best price. Everyone is looking at photos online before deciding to tour a home in person. While professional photography can enhance the appearance of a property to some extent, it has its limitations. Tenants are less likely to follow our advice and deal with the inconvenience of preparing the property to its best condition for selling.
2. Access
A tenant has very little incentive for allowing showings. They must vacate the house, take their pets with them, often for an hour per showing. There could be a full day of showings during the tenant's day off work, and they may simply decide not to allow any showings. Additionally, a tenant is entitled to 24-hour notice. Some buyers wait until the last minute to schedule a showing or have only one day before they leave town. These buyers, who might be willing to pay the most money, may never get the chance to tour the property.
3. Settlement Date
Buyers can become concerned when a property is occupied by a tenant because they may have to wait until the tenant moves out before settlement. Unlike a seller, the tenant may not have the same motivation to vacate the property promptly. Even with a reliable tenant who assures their departure, their lease may extend for another month or two. Your ideal buyer may not be willing to wait.
Comments