Selling a home with a tenant in it cost my clients $20,000

Selling a home with a tenant in it cost my clients $20,000

Earlier this year I helped a family sell their home. They had some debt that built up over a few years, and the plan was simple. Sell, downsize, breathe again.

The home had a basement tenant. A mom with her kid. Six years there, always paid on time, and my clients honestly liked her.

Before we listed, I told them to ask her to move out first. Not because she was a problem. Because everything changes the day the home sells.

They looked at me like I was being paranoid. She's been great for six years, Essam, why would that change? Fair enough. I hoped they were right.

And for a while it looked like they were. She was fine with every showing. She signed the paperwork agreeing to move out, including a cash for keys agreement.

Then the home sold.

Her tone changed almost right away. My clients had already bought their next place, and she knew it. She knew they had a closing date they couldn't move.

She refused to leave, hired a paralegal, and dragged it out as long as she could. She eventually left for twenty thousand dollars.

Where did she move? Four doors down the same street. Into another basement. I still shake my head at that one.

My clients were barely breaking even on this sale. They'd been honest with her from day one. None of that mattered once she figured out how much power she had.

Here's the part that surprised even me a little. A signed agreement to move out doesn't mean the tenant is actually gone. If they decide to stay and fight, it goes to the Landlord and Tenant Board, and that takes months.

A tenant who knows this also knows you've got a closing date and can't wait. That's where they've got you.

My clients closed and they're in their new place now. But the last stretch of a move that was supposed to lower their stress ended up being the worst part of it.

Three things I'd want you to take from this

1. Don't count on the relationship. Six years of on-time rent tells you nothing about what happens when twenty grand is sitting on the table.

2. You lose your leverage the moment you sell. Once you've bought your next home, the tenant knows every delay costs you way more than it costs them.

3. Decide about the tenant before you list. A signed agreement is not the same as an empty basement.

Look, most tenants aren't like this. I've had plenty of great ones. But you don't get to know which kind you have until it's too late, and twenty grand is a lot of money to learn that lesson with.