the GOOD. the BAD. the UGLY. SELLING a home with TENANTS | Phoenix-metro


There are many reasons someone might need to sell a tenant-occupied property in the Valley of the Sun (Arizona).

You hate being a landlord, landlord life is not for you! You want to take advantage of Phoenix, Arizona hot sellers’ market. You are looking to move money elsewhere. If you must sell a home with tenants its best to tread lightly

and do some research. Kidding… JK it’s not breaking bad style of selling homes although we have been called the wild wild west or real estate. Everyday homes in Phoenix, Scottsdale, Tempe, Chandler, Mesa, Gilbert, Glendale, Peoria, and through Maricopa County Arizona are being sold with tenants in place.

Here lies the good, the bad, and the ugly of selling a home with tenants plus some advice and guidance from top Realtor Juan Pesqueira ——————->

The Good (Thank you baby Jesus):

By selling a home with tenants it allows you to continue collecting rents and making money (Cheddar baby). On top of rental income when you close escrow you will receive a huge check (Cha Ching). And if done correctly you will not need to transfer or pay back the deposits. This is a perfect world scenario but as well all know nothing is perfect. There is a saying in real estate, what can, will go wrong. Expect the unexpected.

The Bad (issues that must be addressed upfront):

Tenants have rights! Every landlord in Arizona should read the Arizona Land Lord Tenant act. Get familiar with this bible. Know your rights and the tenants’ rights before listing any property with tenants.

A common tenant right is 48 hours’ entry notice. Many tenants will allow showings in short notice and or in 24 hours but that should be addressed with the tenants and in writing. An entry notice must be in writing or email, should be followed up with a call, and a confirmation. This means that any and all showings, inspections, or any entry must be scheduled days in advance.

On the other side buyers don’t have the time to wait for a showing in a hot market like Phoenix-Scottsdale-Tempe, Arizona. You will have many buyers pass the home up for a showing or interest and some are good buyers. A tenant (not knowing) can easily sabotage a sale by making it difficult to access or not allowing showings. ** Reminder *** read/familiarize the Arizona Land Lord Tenant act. It’s your landlord bible.

The Ugly (Go F**K YOURSELF!):

A tenant can kill the deal fast! A tenant can damage the property before and after inspections. A tenant can damage the home before final walkthrough. If the damage is substantial the new buyer might want to renegotiate price, credit, or terms. The new buyer could back out and the sale falls through. This will leave the issue with you. At this point you lost a good buyer, you waisted a lot of time, and your home is in worse shape than when you put it up for sale. A lose all the way.

A mad or uncooperative tenant is difficult to work with. If a tenant is being difficult with you (Seller) how do you think he will be with a 3rd party like a Realtor? Not good, the deal is dead on arrival.

The truth about selling a home with tenants is your buyer pool is smaller for many reasons (access/entry, unforeseen damages and issues, etc.). Financing is a little trickier for tenant occupied homes when it comes to 1st time home buyers and todays #1 buyer is 1st time home buyer. When selling to an investor buyer make sure to have P&L, leases, and tenant info ready. But all these issues if addressed upfront and correctly will result in a top of the market sale.

Advice (From a top Realtor, John Pesqueira)

Tenants are a crucial part of selling a home with tenants, they somewhat take the position of the owner. As a top Realtor in the Phoenix, Arizona market (including Scottsdale, Tempe, Chandler, Mesa, Gilbert, Glendale, and through Maricopa County Arizona) I have sold many homes with tenants in place. My advice is right from the beginning of the move in date or 1st meet start building a good repour with the tenant. Don’t be a slum lord! Always be courteous and quick to correct issues/respond. Communicate with them often, maybe add verbiage the lease that allows you to enter every 3 months for maintenance and ask them if selling in the future would be an issue – even if you’re not considering selling. This will allow you entry/access and by doing so will keep you up to date with your property.

Although you’re in the real estate business, your also in the people/customer service business. In the people/customer services business people will work with, not against people they like.

This last part is some option scenarios for selling a home with tenants, a guidance as you will.

Option 1: the best option is allowing the lease to expire or let them move out. This allows you to fix up the home and get it ready to sell. It’s almost guaranteed you will make more money without a tenant in place and the home will be ready for new buyer. Even investors prefer a move in ready home vs one with a tenant. Unless they are getting a deal or have done this before.

Option 2: You must sell, don’t spring the sale on the tenant last minute. The minute you are considering selling let the tenant know. This will give them time to prepare and or enough time to find a new place if need. Let’s say at first the tenant is upset, give them time to come around. Sometimes people need a little time to reconsider. Ask their thought about it and if they will be cooperative. More than likely they will be cooperative. If they could be a problem offer them some sort of incentive (less in rent, $ for early move out, dinner, gas, etc.) for early move out or cooperation. If you know for a fact, they will be difficult then wait till the lease expires and let them move out but don’t rush them out. Tenants have rights.

Option #3: Hold onto your investment. Phoenix, Arizona and surrounding cities (Scottsdale, Tempe, Chandler, Mesa, Gilbert, Glendale, and through Maricopa County Arizona.) is one of the hottest real estate markets in the country. Home values continue to go up and last I heard the Phoenix metro area holds the fastest rising rents.

The last and really the first step is choosing an agent. If you choose an agent to begin with then they will guide you through the process. It allows the agent to begin building repour with the tenants as well as yourself.

A Realtor selling a home with tenants should be courteous. A Realtor should try to work with them and handle any and all showings through them. A Realtor should give the tenant 48+ hours’ notice (Or what was agreed upon) to enter. A Realtor should treat them like they treat any client. A tenant should access to the Realtor and his/her team 24/7. And finally, the Realtor should understand the tenant’s position; also understand the seller’s position as I have been both in my life.

Your next step is to decide if you want to sell your property with tenants.  We invite you to do one of two things:

  1. Free Property Price and consultation. Have a confidential meeting with me to find out the price of your property in today’s market.  There is no charge for this service, and you are not obligated in any way to use our services.
  2. You can reach Juan Pesqueira – Attorneys Realty  at  480.458.8007  (This cell does not have a voice message so if I dont pick up leave a detailed message), call my office 480.767.6900, of shoot me an email: Pesqueira2@cox.net. or fill out this form on my website

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