Q&A – Acting As My Own Agent To Sell My Property
Some Questions & Answers
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Q1
As a landlord in Baltimore, MD, where can I get information on what I need to know when acting as my own agent to sell my property; i.e., sale by owner? How do I negotiate with another real estate agent representing a buyer?
A1
An owner always has the right to sell the property without hiring a licensed real estate broker – i.e., act as his/her own agent. However, there are reasons why doing so is often not advisable. I will mention a couple of them.
One is, of course, when the owner is not sufficiently knowledgeable and experienced to protect himself/herself in (1) setting the price, (2) qualifying potential buyers, and (3) negotiating a final contract that contains adequate contingencies regarding a number of issues, particularly when dealing with a sophisticated potential buyer who has a sharp agent.
Another is when the property is other than a few residential units. It is usually difficult for someone who is not a licensed agent to obtain sufficient information regarding market value of commercial properties and larger residential properties, which can result in pricing it too high and not obtaining offers or too low and giving away some potential profit. The number of units where this is a significant issue depends on the type of property, the location of the property, and the degree of assistance the owner might be able to obtain from acquaintances who are active licensed agents, appraisers, or sophisticated investors. Also, larger properties are usually sold via networking among licensed agents who have somewhat captive buyer and seller clients. Most owners do not have access to that network or to other marketing tools available to professionals who deal in large properties.
It is possible to end up with a higher net sale price when using a competent experienced agent that more than offsets the commission being paid.
Regarding the issue of negotiating with real estate agent representing a buyer, the best protection is: (1) understanding the process as well as a professional would and acting professionally; (2) pricing the property correctly; (3) providing adequate financial and other information, including a complete detailed info package if it is more than a duplex; (4) try to detach yourself from the personal issues as if you were acting as agent for the owner; and (5) don’t let an agent, who may have done dozens of similar deals, intimidate you or push you into unacceptable terms.
For a review of buying and selling issues and some insight into the issues that you might not be aware of see our “Buying & Selling Income Property” eCourse, of which I am the author. Keep in mind that most buying issues are relevant also as seller issues, just viewed from the other side of the fence.
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Q2
I am owner of a rental property in Phoenix, AZ and am interested in selling the property while I still have a tenant in it. Do I need to offer the tenant first right of refusal to buy the property? If so, what formal document or form must I use to confirm my wish and confirm the tenant’s decision to buy or not buy?
A2
Unless there is a written document giving the tenant a first right of refusal, either in the lease agreement itself or via separate written contract, you do not have to even tell the tenant that you are selling the property, although it might result in a better relationship when needing to show the property or have inspections performed if you keep the tenant informed. Absent some explicit clause in the lease agreement specifying otherwise, the lease follows the property. That is, the buyer would have to honor the lease agreement and the tenant would have to continue fulfilling the terms of the lease.
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Q3
I have renters who signed a “no pets” lease. They are now keeping pets. I would appreciate suggestions on course of action.
A3
I assume that you just discovered the violation and that the tenants know that you know. It is important that you now take immediate action to correct the problem in order to avoid the possibility that your inaction could be taken by the tenants and even by a judge to mean that you have waived your rights to enforce that lease provision.
Your first step is to serve written notice on the tenants with the notice demanding that they immediately get rid of the pets. In many states you can serve a notice that both demands that they cure the default within a certain number of days, the period varying among states, or immediately vacate the premises. Some states have a format referred to as a “Cure or Quit Notice” while other states have other names for a type of notice that can be used to accomplish the same thing. For example, the appropriate notice might also be titled “X-Day Notice of Violation of Lease.”
Failure of the tenants to cure the default within the period specified by state law allows the landlord to immediately file for eviction. Although most states require the landlord to allow continued tenancy if the tenants cure the default; some states allow the landlord to demand that the tenants leave even though they have cured the default. For example, Nevada has both “Notice of Breach with Right to Cure” and “Notice of Breach with No Right to Cure” types of notices. Without knowing the state in which the rental property is located, I can’t be more specific on this issue. I suggest that you click on the “Forms by State” link under “Landlord Legal Forms section of your membership home page and check what’s available for your state.
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