Northeast Realty + Co. owners Christopher Chadzynski and Patrick Mulligan have sold millions worth of income properties throughout the Greater Boston Area. We know what it takes to get you the highest price possible in this market. Whether it’s an off-market, no contingency sale, or on-market bidding war, we can help you navigate these transactions, providing for a minimal amount of inconvenience to any current occupants while simultaneously helping you achieve the full market value potential from your investment.
Selling During the Covid-19 Pandemic
As the COVID-19 pandemic has made social distancing a key priority for all of us there is still a need for business to continue on a remote basis. Within the real estate industry, this puts a major focus on the need for virtual and 3D tours on both the residential and commercial front. People still need housing and brokers and property owners will need a way to display their properties without an in-person tour. That is why at Northeast Realty + Co. we have invested in state-of-the-art 360 virtual tour technology allowing for our clients to experience our listings from the privacy and safety of their own homes. This also saves our agents wasted time and creates a better customer experience for each potential buyer.
How to Sell a Multi-family Property
Selling a multi-family home is substantially more complex than selling a single-family home. One of the top reasons why selling a multi-family is generally more complex is because it typically involves more people than just the one owner of a single-family home.
When selling a multi-family property the probability that you’re involving 6-12 people is high. Depending on the number of units in a multi-family property, you may only be dealing with a couple of families or a dozen families.
There are certain rules, regulations, and laws that multi-family property owners must be aware of and also abide by. These rules, regulations, and laws will vary from city to city and state to state.
It’s highly recommended that you consult with an attorney prior to selling a multi-family home to make sure you’re not going to put yourself in a situation where you could be sued. Not being aware of rules, regulations, and local laws is one of the top home selling mistakes made by multi-family property owners.
Read on to find out my top 5 tips for selling a multi-family home. Multi-family property owners who follow the below tips will put themselves in an excellent position to sell their property while avoiding potential issues or roadblocks.
Review Leases, Occupancy, and Tenant Rights
Before listing a multi-family home for sale, it’s vital to review all leases and the occupancy for each unit. As mentioned above, multi-family property owners can get themselves in trouble if they’re not careful. It’s important to always keep in mind tenant rights when selling a multi-family home.
There are a few frequently asked questions from home buyers that multi-family property owners will be asked during the sale process. By reviewing the current leases and occupancy of each unit, multi-family property owners will be able to answer these questions accurately. Below are some of the top questions asked by buyers who are looking to purchase a multi-family home.
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What are the terms of any/all leases?
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What are the rent amounts for each unit?
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What’s included in the rent for each unit?
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Are there security deposits being held?
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Are the rents able to be subsidized by Government assistance?
Reviewing the leases and occupancy for each unit can also help determine whether or not to sell the property while it’s being occupied by tenants. Selling a home with tenants can be tricky and it can also bring other potential issues into the equation.
For example, if a multi-family home is being sold while tenant occupied and the leases are for an extended period of time, it potentially can eliminate a large number of potential buyers who’re looking to buy a multi-family home and plan on or need to, occupy one of the units. One of the disadvantages of a VA home loan or FHA loan is that the property must be occupied by the buyer, so if a buyer is planning on utilizing one of these mortgage products, they wouldn’t be able to purchase a tenant-occupied multi-family home.
Selling a multi-family home is easiest and most successful if it’s unoccupied. This eliminates potential issues with coordinating home showings or issues with occupancy requirements. If this isn’t a possibility, then it’s important that the owner has full cooperation from all parties who’ll be impacted during the sale of the multi-family property.
Preparation Is Key When Selling a Multi-family Home
Preparing a home for sale is critical when selling any type of home, whether it’s single-family or multi-family. Since many multi-family properties are purchased as investments, preparing for the sale becomes necessary.
One of the most important factors for investors who are looking to buy multi-family homes is the number of updates the home appears to have. A home that isn’t prepared for sale can appear to require more costly maintenance than it actually does.
For multi-family property owners who are attempting to prepare and sell a home on a budget, I recommend tending to a few key areas of the property. Below are a few of the areas and items that should be addressed prior to listing a multi-family for sale.
- Curb Appeal – Simply tending to the exterior curb appeal of a multi-family home can go a long way. Trimming bushes/shrubs and making sure any flower beds are landscaped are a couple of tips for improving the curb appeal of the property.
- Clean Up Common Areas – Depending on the multi-unit, there may be some common areas, such as laundry or a vestibule. It’s important that all common areas in the property are cleaned up and well maintained.
- Parking Areas – If the property has designated parking areas or garage spaces, making sure these are well defined and in good condition is critical. If there is an off-street parking area, a simple seal of the driveway can go a long way and doesn’t cost a ton of extra money.
- Doors & Locks – All doors and locks within the multi-family property need to be working well. It’s not a good reflection of a property when the locks are difficult to use and a showing agent is struggling to access the units within the property.
When selling a multi-family home, it’s extremely important that it’s prepared for the market. Not doing so can make or break whether the property sells and also it can impact an owner’s bottom line.
Hire an Agent Who Has Experience Selling Multi-family Homes
Hiring a top real estate agent with experience is extremely important when selling any type of property. For example, when selling a waterfront property, hiring an agent who primarily sells mobile homes in a park wouldn’t be the best idea.
It’s critical when selling a multi-family home that your agent has experience selling multi-family homes. To help ensure an agent who has experience selling multi-family homes is hired, there are certain questions to ask during interviews.
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How do you handle showings when a property is tenant-occupied?
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How much notice do you provide?
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In the past, how have you handled uncooperative tenants?
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Can you provide the contact information of the previous owner who you represented during a recent multi-family sale?
Asking the right questions during an interview can greatly improve the chances an agent who has experience selling multi-family homes is hired.
Not only is it important to make sure the agent has experience selling a multi-family home but it’s equally as important to make sure they know how to effectively market a home. Since the majority of home buyers are finding the home they eventually purchase on the internet, it’s critical the agent knows how to reach potential buyers.
This is done by using the best real estate marketing strategies. Marketing strategies such as using social media, optimizing their website to be found in searches, and using high-quality photography and videos are a few ways top real estate agents are marketing their client's homes to potential buyers.
Have Important Documents Ready
There are certain things to know before selling a home, regardless of whether it’s a single-family or multi-family home. It’s helpful that before listing a home for sale that important documents are readily accessible for potential buyers.
Documents that should be readily accessible, whether selling a multi-family home or not, include documentation relating to roof age or warranties, the age of the home's HVAC systems, and any receipts of remodeling projects that have been completed.
One of the most important features that today’s home buyers are looking for in a home is updated and newer mechanics, such as roofs and HVAC systems. Home sellers who have records and receipts showing the ages of these components give themselves a huge advantage.
When selling a multi-family home, it’s very important to have financial documents readily available for prospective buyers. Since multi-family homes are often purchased as an investment, having the financial documents available can be extremely helpful for potential buyers.
The most important financial document that should be readily available when selling a multi-family home is the yearly net operating figures. This document shows a potential buyer the income from monthly rents and subtracts out the expenses of the property, such as yearly homeowners insurance, yearly refuse, yearly water usage, and any repairs that have been completed recently.
Bidding Wars
Wanting to know how to deal with a bidding war on a house is far more common today than it used to be. When selling a home in a hot market, it is normal to get multiple offers. Sometimes, if the market is hot enough, the offers can start getting quite competitive, with bids going higher and higher.
There are also times when sellers will price their home lower than it is worth just to start a bidding war.
Whatever your particular circumstances, if you start getting multiple offers on your home, you are going to have to choose the one that works best for you – and that does not always mean the offer for the most money.
Two of the questions I am often asked is “How do I handle multiple offers on my home?” or How do I deal with a bidding war on my home?”
Before we get into how to handle multiple offers, let’s first discuss how you can increase the odds of actually getting them. One of the best ways of getting multiple offers in a strong seller’s market is to defer your showings for a short period. Deferring showings works like this – you list your home on a Monday or a Tuesday into the multiple listing service, but you don’t let anyone into your home until the weekend.
What you are doing is creating demand for your home. You are getting the word out your home is for sale and putting people on notice. Buyers who are looking for your type of property will be lining up at the door come the weekend.
Instead of taking an offer from the first person that sees the house, you’re dramatically increasing the odds there will be multiple offers. Make sure you follow the reference on deferred showings to read about this important sales tactic.
Unfortunately, there is a large percentage of real estate agents who have no idea what they are doing when it comes to multiple offers. Incompetence can cost a seller dearly when it comes to knowing how to handle multiple offers. Knowing how to handle multiple offers will not only go a long way to having a successful transaction but maximize your profit.
Final Thoughts on Selling a Multi-family Home
As you can see, selling a multi-family home is much different than selling a single-family home. Even though selling a multi-family home is generally more complex, that doesn’t mean that it has to be impossible. By following the 5 tips discussed above, multi-family property owners put themselves in a much better position to experience a smooth and successful sale.
Do you own a multi-family property within the Greater Boston Area? If so and you’re thinking about selling your multi-family property, the above 5 tips should be extremely helpful. If you don’t have a qualified real estate agent picked out yet, then please call or text us at 617-249-7141.
