Whether a landlord or a tenant, you must know what happens when a rental property is sold. What are the rights and responsibilities of both parties? You are wrong if you think it’s all about signing papers and exchanging keys.
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Let’s see all the steps in detail to get all the procedures;
1. The Property Owner Decides to Sell:
The story begins when the current owner decides to sell the rental property. There may be multiple reasons behind this sudden decision.
2. List the Property:
As the first step is final, the second step is to list the property for sale. For this purpose, find a real estate agent. Otherwise, you can list the property independently on real estate websites or other social media platforms.
3. Visit the Property:
Now potential buyers can visit the required property to check its condition and suitability. These visits let the buyers decide if they want to purchase this property. Does it meet their requirements and expectations? If yes, they go for any issues or repairs that might need attention before making an offer.
4. Successful Negotiation:
Now potential buyers may make suitable offers on the property according to the market. Various discussions occur between both parties, including the closing date and fixtures.
If both parties consent on the same terms, the seller accepts the buyer’s offer. The final discussion signifies a mutual agreement between the seller and the buyer.
5. Legal Documentation:
As the deal is final verbally, legal procedures come into play. These procedures include crafting and signing the purchase agreement, conducting title searches to ensure no hidden loans or legal issues with the property, and preparing final documentation for the transfer of ownership.
6. Funding and Contingencies:
Buyers must be assured that their financing is secured for the purchase. All their contingencies must be resolved based on factors like obtaining mortgage approval, satisfactory inspection results, or the sale of their current property.
7. Transferring Ownership:
Once the sale is closed, all parties are involved in finalising the transaction. This typically includes
1. signing the final paperwork,
2. transferring funds, and
3. officially transferring property ownership from the seller to the buyer.
8. Handling Tenants:
Don’t ignore the tenants; rather, seek additional considerations. The terms of the sale must not affect the tenants’ leases. Transfer the existing leases to the new owner.
9. Tenant Rights:
Many people ignore this crucial element when selling and purchasing property. Tenants have rights, too, even when a property is being sold. Inform them when the owner decides to sell his property.
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10. Communication:
The communication level of the tenant, buyer, and seller must be friendly, courteous, and cooperative. Clear, concise, and timely communication helps to make the process pleasant.
11. Post-Sale Transition:
The game is not over as the sale is finalised. For both parties, there is a period of transition. The seller will transfer utilities, cancel his old insurance policies, and will clear any dues related to the property. On the other hand, the buyer will have to update ownership records and arrange new insurance policies.
Let’s outline the discussion about when a rental property is sold. Selling a rental property is not a single-step process. Rather, it comprises multiple steps requiring careful consideration and planning. From the first step when you decide to sell your property to the last step of closing the sale, each step needs full attention.
