Published by Selling Keys

Selling a property with tenants in place comes with unique considerations. Many landlords in Vancouver wonder if they should wait until a lease ends, or if selling with tenants can be just as effective. The answer depends on local laws, buyer expectations, and the strategy you choose.

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Step 1:

In Washington, tenant leases remain valid when a property is sold. The new owner takes on the role of landlord and must honor existing agreements.

Understand the Legal Framework

In Washington, tenant leases remain valid when a property is sold. The new owner takes on the role of landlord and must honor existing agreements.

Landlords should also be aware of:

• Disclosure requirements: Sellers must provide Washington’s Form 17 Seller Disclosure, which includes tenant information.

• Security deposits: Deposits must transfer correctly to the new owner.

• Showings: State law requires at least 48 hours’ written notice before entering a rental for non-emergency reasons.

• Local rules: Vancouver has adopted additional tenant protections, so it’s important to confirm current city regulations before making plans.

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Step 2:

The type of buyers interested in a tenant-occupied property

Consider the Buyer Pool

The type of buyers interested in a tenant-occupied property will vary:

• Owner-occupants: Buyers planning to live in the property may be limited if a lease is still active, especially if their loan program requires them to move in quickly.

• Investors: Many investors prefer tenant-occupied properties, as they provide immediate rental income.

• Cash buyers: These buyers often close quickly, though usually at a discounted price compared to the open market.

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Step 3:

Landlords typically consider one of the following approaches

Explore Your Options

Landlords typically consider one of the following approaches:

1. Sell with tenants in place

• Market the property as an income-generating rental.

• Provide leases, rent history, and tenant payment records to show stability.

2. Negotiate tenant move-out

• Offer incentives such as relocation assistance or a lease termination agreement.

• This can make the property more attractive to owner-occupants.

3. Sell to a cash buyer

• Provides speed and certainty.

• Often comes at a lower sale price.

4. Use a 1031 exchange

• Allows an investor to defer capital gains taxes by purchasing another qualifying property.

• Must be planned carefully, as timelines are strict.

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Step 4:

Regardless of the path chosen, preparation is important

Prepare for the Sale

Regardless of the path chosen, preparation is important. Sellers should:

• Gather all lease agreements, rent rolls, and security deposit documentation.

• Keep maintenance and repair records up to date.

• Request estoppel certificates from tenants to confirm lease details.

• Communicate clearly with tenants about showing schedules and next steps.

A transparent process helps both buyers and tenants feel more secure in the transaction.

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Conclusion

Selling a tenant-occupied property in Vancouver requires careful planning, but it does not have to mean losing value. By understanding Washington’s laws, identifying the right buyer pool, and preparing proper documentation, landlords can complete the process smoothly and with fewer surprises.

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The Key Note

The strength of your documentation — leases, rent history, deposit records, and tenant communication — can directly impact the buyer’s confidence and the final sale price.

Kelyn’s Tips

From experience helping Vancouver landlords navigate tenant-occupied sales, here are a few practical ways to keep value intact:

• Lead with transparency: The earlier you share lease details and tenant history, the smoother buyer negotiations will be.

• Highlight stability: Long-term tenants with a strong payment record can actually add appeal for investor buyers.

• Respect tenant cooperation: Small incentives for showings or paperwork can make a big difference in maintaining goodwill.

• Match strategy to your goals: If maximizing price matters most, explore tenant move-out or a 1031 exchange. If speed is the priority, consider cash buyers.

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💡 Thinking about selling your tenant-occupied property?
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