Think about when you see an address of a home you are interested in seeing. You send it to your REALTOR® and anxiously await when you can tour the home. Your REALTOR®’s responsibilities include first checking the property’s status on the MLS. It is still ACTIVE and available or like so many times in this unbalanced market, is it already under contract? If we’re lucky enough that it is still active and available, we’ll check the occupancy. If it’s vacant, we’ll schedule according to availability. If it is owner occupied, the rule of thumb is to allow a 24 hour notice. Although the sellers have been advised to keep the home ‘show-ready’, the house is still being occupied and ‘lived-in’. We allow that notice so the seller can clean up after children, everyday life and arrange for family pets to be removed or secured for the showing. The most challenging of the occupied status is when the property is tenant occupied. There are a number of conditions to keep in mind for showing leased properties. First, showings must be confirmed by the tenant just as owner occupied properties. Tenant occupied showings can have a different ‘flavor’ to the showing experiences. The tenants are often present during the showings, more so than owner occupied homes. Being in a college town can make this a bit more interesting. As a REALTOR®, it’s not uncommon to show an investor rental/investment opportunities with tenants sleeping in the bedrooms we are showing. Yes, you read that correctly. Books could be written of the colorful stories of what REALTORS® have walked into during showings of rental properties. If you are an (out of town) owner of the rental/investment property, be cognisant of this dynamic. Although tenants may be paying rent on a timely basis, be aware of the power they have during the showing process. Tenants don’t necessarily share the same motivation to sell your property as you. They may/may not clean up as well as you would. Being present during the showing, they may share some complaints that they may/may not have shared with you as the property owner. Their complaint that they only have about two minutes of hot water tells you, (as the purchaser) that the water heater will need immediate attention. Finally, understand the terms and conditions of the lease will supersede the purchase of the home. For example, let’s say you are the purchaser of a house. The timeline of the closing of that transaction may take thirty to sixty days, depending on your loan program. However, if the house is tenant occupied and leased, you will need to wait until the lease expires to take occupancy of the property. So if the lease was signed in July 2022 for an annual term, you can not occupy the house until July 2023. Additionally, you’ll ‘inherit’ the terms of the lease. If the lease allows pets and smoking, you’ll need to honor those terms until the lease expires.
Until next week, love where you live. And if you don’t… contact your local REALTOR®.
Brian Haufe, 2022 MBOR President