Selling a House With a Tenant in It: What It Does to Your Price

Most buyers who want to live in the house use a mortgage that requires them to move in soon after closing. FHA loans, for example, require the buyer to move in within 60 days and live there for at least a year. If your tenant has six months left on a lease, those buyers can't buy, no matter how much they like the house. That leaves investors, and investors price an occupied house differently.

When we price a tenant-occupied house, the tenant shapes the number. We work out what it takes to get the house back or keep it rented: the months left on the lease, whether the rent comes in on time, a possible payment for the tenant to move by a set date, and the turnover work we can't see because we can only walk the house with the tenant there. Our team started out in student housing, so leases, deposits and move-outs are familiar ground. You get the number at the appointment, and if you need to, we can close in 7 days or sooner. See how we calculate a cash offer for the rest of the math.

Under 68 P.S. § 250.104, anyone who buys real estate takes on the same duties and gets the same rights as the person they bought it from. For a rental, that means the buyer gets your lease, your tenant and your obligation to return the deposit. As a legal aid attorney told The Philadelphia Inquirer, “if you bought a place with a tenant in it, you bought the lease.” The exception is a lease that says a sale ends it; read yours before you list.

To end a tenancy, Pennsylvania uses a written notice to quit. It works at the end of the lease term, after a breach, or after unpaid rent, and the notice period depends on the lease:

A notice to quit is a step, not a lockout. If the tenant doesn't leave, the next step is a case before the magisterial district judge. Our guide to squatters and non-paying tenants walks through that timeline.

The Attorney General's tenant and landlord guide says tenants must give the landlord reasonable access to make repairs or show the unit. Pennsylvania law doesn't set a notice period for entry, so the lease controls. Give more warning than the lease requires, keep showings to a few set times, and tell the tenant early that you're selling and what it means for them.

• Tell the tenant you're selling before the sign goes up, and explain that the lease carries over.
• Agree on showing times in writing, with as much notice as you can give.
• Do a single walkthrough for serious buyers instead of a stream of visits.
• Fix anything the tenant has asked for. A buyer will see it anyway.
• Keep taking rent the normal way, and keep the ledger current.
• If you want the house empty, offer a move-out deal early rather than late.

Cash for keys is a simple trade: the tenant agrees to move out by a date, leave the house empty and hand back every key, and you pay them when they do. It's not an eviction and it doesn't replace one. If the tenant changes their mind or misses the date, you're back to a notice to quit and, if needed, court. That's why we run both at once.

• Put it in writing. Have a Pennsylvania attorney draft or review the agreement.
• Name the move-out date, the condition you expect (empty and broom-clean) and every key, fob and remote.
• Pay at the handover, after a walkthrough, never in advance.
• Say what happens to the security deposit. You still owe a return or a written list of damages within 30 days.
• Get a forwarding address in writing so the deposit can be returned.
• Get a signed surrender of the house when the keys come back.

• The signed lease and every renewal or addendum.
• A rent ledger for the last 12 months, showing what was paid and when.
• The deposit amount, where it's held and any interest owed. Deposits over $100 must be held in escrow, and after two years most of the interest belongs to the tenant.
• Any notices you've given or received, and any court papers.
• For a voucher tenant, the housing authority contact and the current contract.
• Who pays which utilities, and the account names.
• Keys for any space the tenant doesn't use, such as a garage or basement.
• The tenant's contact details, with their permission.

Pennsylvania caps a deposit at two months' rent in a lease's first year and one month's rent after that (68 P.S. § 250.511a). Hand the deposit over at closing, or have the title company credit it to the buyer, so the new owner can return it when the tenant leaves. Under 68 P.S. § 250.512, a landlord who misses the 30-day deadline loses the right to keep any of it.

If you're weighing more than one path, see our Cash, Cash+ and Max Cash options and how we buy rental properties.