Occupied Rentals for Sale
Property Management: How to Handle Occupied Properties For SaleBy Lambert Munz MPM, RPM Arbour Real Estate Mgmt, Inc.
Our leases, and many others, address the showing of units to prospective buyers. The agreement language refers to this as "exhibiting the premises to prospective or actual purchasers". When a tenant is given notice to allow agents to show units as well as being reminded that their lease requires them to do so, guess how they feel. They are upset because a) strangers are going to disturb their daily routine and work schedules. b) They are going to be kicked out as soon as it sells. At this point they do not give a tinker's damn about the owner's need to sell. They are going to be hard to reach and are not going to cooperate by taking off work to show units. Also, the tenants are probably in no mood to clean the unit every time an agent calls. What about putting a lockbox on door allowing agents to enter when the tenant is gone? At our company, we reserve the right to cancel our contract if a lockbox is put on a door without the tenant's permission. It is a liability we don't wish to share. If a tenant does agree to the lockbox, then we will ask in writing that we be excused from liability as we have no control over who is entering the home. The listing agent doesn't even know who the parties are and agents will enter without calling. Anyone could walk in the middle of something private/personal. THE SOLUTION TO THE PROBLEM IS SO SIMPLE - It is called compensation, AKA money. Money does wonder to gain cooperation. Resentment seems to vanish. This reminds me of a story about my wife. Years ago, she was managing a large community of over 400 units. The owner decided to sell. Of course, my wife became concerned about whether or not the new owner would retain her or that the company she worked for would transfer her to another job. This was a large transaction and the seller was a sophisticated investor. He told my wife's boss that he wanted to give my wife a $4,000 bonus for help with the sale with the new buyer. The boss told the owner that this was not necessary. The owner insisted that my wife be given this bonus as he wanted the transaction to go smoothly. He knew my wife had other concerns besides his successful sale. However, with the added bonus, my wife was enthusiastic to help the sale be consummated. With a $4000 bonus, she could worry about another job later. The magic of cooperation is so simple and is often overlooked or purposely ignored. The tenant is being inconvenienced and their privacy disturbed. It only makes sense that they should be given the courtesy of compensation for their cooperation. An addendum can be prepared that will give them a free month's rent or a move out bonus. A condition of receiving the bonus will be a tidy house for showing and agreed upon showing times. No knocks on the door without proper notice. Agents should use this same strategy regarding property managers when needing their cooperation with the sale of an owner's property. The property management at this point is thinking that they will no longer manage the home and the enthusiasm for helping is disappearing. Think about cutting them a bonus if the sale goes through. The result will help in spades -- simply because nobody else does it.
Licensed with CA Dept of Real Estate 44 years as a broker. Commercial investments. Currently property manager with 27 years experience residential and commerical Hold two designations MPM Master property manager and RMP Residential Management professional awarded by National Association of Residential Property Managers Read chapter one of our new Book House Investors' Manual at www.arbourpm.com
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