Are you considering selling your house with tenants in Colorado? If so, you’re likely wondering what the process entails and how it will affect you and your tenants. This blog post will provide an overview of the process of selling a house with tenants, including what to expect from both the buyer and tenant perspectives.
We’ll also cover some of the things you should keep in mind when deciding whether or not to sell your property with tenants in place. So, if you’re considering selling your house with tenants in Colorado, keep reading!
The Benefits of Selling a House with Tenants
There are a few reasons to sell a house with tenants.
An Enticing Offer
Buying a house with tenants already in place can be a desirable offer for potential buyers as they don’t have to worry about looking for new tenants.
A Better Sales Price
In addition to being an enticing offer, houses with tenants can be sold for a higher price than those without, as it includes an income stream.
A Way to Avoid the Eviction Process
Selling your home with tenants can also save you the trouble and headache of evicting your current tenants to be able to sell.
The Challenges of Selling a House with Tenants
There are also a few challenges to selling your property with tenants.
A Lengthy Process
Though buying a house with tenants in place may be an attractive option for some buyers, it can be a disenchantment for others, making it harder to sell.
A Chance for Extra Expenses
If the house is damaged or needs repairs to look better, you may have to pay to get those done, so the house looks more appealing for sale.
Determine If You Can Sell a House with Tenants
The first step in determining if you can sell your house with tenants is to review your lease agreement to verify your tenants’ rights. If your tenants have a valid lease agreement, you’ll need to follow the terms outlined in the lease when it comes to selling the property. Reviewing your state’s landlord-tenant laws is also a good idea to make sure you’re aware of your rights and responsibilities as a landlord.
If you don’t have a lease agreement or your tenants are month-to-month, you’ll have more flexibility in terms of selling the property. However, giving your tenants notice is still a good idea before listing the property for sale. This will give them time to make other living arrangements and avoid any potential conflict down the road.
Colorado Eviction Laws
Landlords in Colorado cannot evict tenants before their rental terms have expired without legal cause. Under Colorado law, legal cause is defined as failing to pay rent, violating the lease or rental agreement, or committing a serious act, such as a crime or violence against another resident. It is necessary for the landlord to terminate the lease or rental agreement through a notice before evicting the tenant for one of these reasons.
Failure to Pay Rent & Lease Violations
Landlords must give a ten-day notice to tenants who are in default of rent or have violated their lease. Tenants have ten days to pay rent, fix the violation, or move out. An eviction lawsuit can be filed if a tenant fails to comply with either of those requirements.
Criminal Acts or Violence
Eviction can also occur if a tenant commits a more serious offense, such as violence against another tenant, drug use, or criminal activity at their rental unit. Landlords are required to give tenants three days’ notice before evicting them for any of these reasons.
The landlord is not required to give the tenant an opportunity to fix the violation. A landlord can file an eviction lawsuit against a tenant who does not vacate the rental unit by the end of three days.
Should You Evict?
Despite being legal, evictions are complicated and can get messy. Regardless of the circumstances, it is always a good idea to give your tenants notice before listing your property. By taking this step, they will be able to come up with alternative living arrangements and avoid future conflicts.
How to Sell a House with Tenants
Once you confirm that you can sell the house with tenants, you have three options: listing on your own, hiring a real estate agent, or selling the house to a home buyer.
Listing on Your Own
The first option is listing the house on your own, which can be done through online advertising, handing out flyers, or putting up a For Sale sign in the yard.
This option is convenient if you feel comfortable handling a home sale’s marketing, negotiations, and closing components. You’ll also save money as you won’t have to pay real estate commissions.
Hiring a Real Estate Agent
The second option involves hiring a real estate agent to list and sell the house for you. This is a great alternative if you don’t have time to sell the house yourself or have no experience negotiating a home sale. There is, however, an agent closing fee involved once the sale is final. This fee is usually 6% of the total sales price.
Selling to a Home Buyer
The third option is selling the house to a home buyer. This process is ideal when you need to sell the home quickly, and you don’t want to spend an extra penny on it. A home buyer will make an offer for the house as-is and will take care of all closing costs, so you don’t have to spend more money to sell.
Things to Keep in Mind Before Listing Your House for Sale with Tenants
Prior to listing a house for sale with tenants in Colorado, there are a couple of things you need to be aware of:
- You will need to provide your tenants with at least a 60-day notice that you intend to sell the property. This notice can be given in writing or orally, but it must be given at least 60 days before listing the property for sale.
- You will need to provide your tenants with a copy of the listing contract once you and the potential buyer have signed it.
- You are not required to give your tenants the first right of refusal when selling your house, but it is recommended that you do so. This means that if a tenant makes an offer on the property that is equal to or greater than the asking price, you must give them the opportunity to purchase the home before selling it to someone else.
- You are not required to disclose to potential buyers that tenants are currently living on the property. However, it is advised that you do so to avoid any potential legal issues down the road.
Preparing the House for Sale
Once you’re ready to sell your house, here are two things you should take care of.
- Talk to your tenant – have a conversation with your tenants about your plans to sell the property. Be sure to let them know there is no requirement for them to move out and that you will accommodate their schedule as much as possible.
- Get the house in order – Take care of any repairs that need to be made on the house to make a good impression on potential buyers. In addition, make sure all utility payments are up to date.
Closing Tips to Sell a House with Tenants
When the time comes to close on the sale, there are a few things to keep in mind to comply with Colorado’s landlord-tenant laws.
First, you must provide written notice to the tenants of the sale at least ten days prior to closing. The notice must include the date of closing and the name and address of the new landlord.
Then, ensure all utilities are transferred into the new owner’s name.
Get a Cash Offer for Your Home Today
Selling a house with tenants can be stressful and time-consuming. At Favor Home Solutions, we’ll provide you with a fair cash offer and work with you every step of the way so you can sell your house quickly and without spending an extra buck. We buy your house as-is and take care of all closing fees so you can put cash in your pocket and move on with your life. No hidden fees or commissions! Contact us to get started today!