Selling a house with a sitting tenant

Selling a house with a sitting tenant may be less hassle than waiting until it’s vacant, but it’s also likely to limit your pool of potential buyers, so is it worth it?

There are several different ways to sell a rental property; some will require the property to be vacant, whilst others will enable you to sell with a tenant. This guide will help you to explore which options are likely to result in the highest sale price, which will be the quickest, and which will best -suit your personal circumstances.

In this guide

  1. What is a sitting tenant?
  2. Can you sell a house with a sitting tenant?
  3. What are the downsides of selling a house with a sitting tenant?
  4. How much will my property be worth if I sell it with a sitting tenant?
  5. How to sell a house with a sitting tenant
Should you sell a house with a sitting tenant?

What is a sitting tenant?

A sitting tenant is the name given to a tenant who remains in a property when the property is sold.

A property may have a sitting tenant for a few different reasons. Sometimes an investor will choose to sell a property with a sitting tenant because a property offers an attractive investment opportunity for other landlords with a tenant already in situ. Alternatively, a property may have a sitting tenant because the property owner needs a quick sale and can’t afford to wait for the current tenancy to come to an end, or because the tenant has an assured tenancy that prevents them from being evicted.

Can you sell a house with a sitting tenant?

Yes. In fact, selling a house with a sitting tenant may offer several benefits to both you and the new owner.

Selling a house with a sitting tenant will mean no costly vacant period around the time of the sale for either you or the new landlord. You can keep receiving the rental income right up to the day of completion, and the new landlord can receive rental income right from the first day of property ownership.

What are the downsides of selling a house with a sitting tenant?

The main challenge when selling a house with a sitting tenant is that you will only be able to sell to other investors.

There are currently just over 2.5 million landlords in the UK and nearly 15 million homeowners, so only being able to sell your property to an investor limits your pool of potential buyers considerably. A smaller pool of potential buyers means your property may take longer to sell and is likely to achieve a lower sale price than selling on the open market as a vacant property. There may also be significant extra paperwork involved in the sale of the property as you will need to provide details of the tenancy agreement, financial information relating to the annual yield achieved through the rental of the property, and details of the secure deposit scheme your tenant’s deposit is kept in. This deposit will need to be transferred to a new scheme upon the sale of the property.

How much will my property be worth if I sell it with a sitting tenant?

You should speak to an estate agent in your local area to get an accurate estimate of what your property might be worth both vacant and with a sitting tenant. However, as a general rule, it has been estimated that a property with a sitting tenant could be worth up to 60% less than the same property sold with vacant possession.

How to sell a house with a sitting tenant?

There are several different ways of selling a house with a sitting tenant. Most come with a number of pros and cons.

Auction

Property auctions often attract investors, so they can be a great place to sell a property with a sitting tenant.

The biggest downside to selling a house with a sitting tenant at an auction is that it is difficult to predict what price you’ll achieve. If there is a great deal of interest in a property, competing bids will drive the price up, but if there aren’t many bidders for your particular property it could end up selling for much less than predicted. It’s also worth keeping in mind that around 30 percent of properties that go to auction fail to sell. If your property does not receive any successful bids, you will still be required to pay the listing and marketing costs associated with taking a property to auction.

Including marketing time, selling at auction will usually take 8-10 weeks.

Open market

There is nothing to stop you selling an investment property on the open market through an estate agent, just as you would with any other property. You will, of course, achieve a lower sale price than you would if you were selling a vacant property, but selling via an estate agent will enable you to get the property listed on the main property portals, which will help you reach the widest possible audience.

It currently takes an average of 4-6 months to complete the sale of a property on the open market, however it may take longer if your property can only be sold to investors.

Open market

It currently takes an average of 4-6 months to complete the sale of a property

There is nothing to stop you selling an investment property on the open market through an estate agent, just as you would with any other property. You will, of course, achieve a lower sale price than you would if you were selling a vacant property, but selling via an estate agent will enable you to get the property listed on the main property portals, which will help you reach the widest possible audience.

Cash home buying companies

There are some cash home buying companies who will offer to buy your property directly, even with a tenant in place. They will pay less for your property if the property is not sold with vacant possession, however.

It’s worth noting that many property buying companies who say they can buy tenanted properties will be acting as brokers, trying to find an investor to purchase your property. This means they will not be able to offer you any guarantees about the price they will pay for your property or how quickly they can buy it, so it’s important to proceed with caution.

If you have the option of giving your tenant notice, but just don’t want the hassle and expense of a costly vacant period whilst the sale goes through, a sale to a genuine, direct cash home buying company could provide the solution.

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If you’d like to find out how much a professional home buying company could pay for your property, call Quick Move Now’s friendly team today on 0800 068 3366 or fill in our online enquiry form for a free, no-obligation cash offer

Author:

Beth Lane

Beth Lane

As an integral part of the marketing team, Beth is responsible for creating Quick Move Now’s external communications and dealing with national and regional press enquiries.

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