{"id":222,"date":"2022-10-21T22:33:56","date_gmt":"2022-10-21T22:33:56","guid":{"rendered":"https:\/\/www.xome.com\/blog\/?p=222"},"modified":"2026-03-02T20:15:37","modified_gmt":"2026-03-02T20:15:37","slug":"what-to-expect-when-buying-an-occupied-property","status":"publish","type":"post","link":"https:\/\/www.xome.com\/blog\/what-to-expect-when-buying-an-occupied-property\/","title":{"rendered":"Buying a Tenant or REO-Occupied House at Auction"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"222\" class=\"elementor elementor-222\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a462fb7 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a462fb7\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-bbf87d4\" data-id=\"bbf87d4\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-71f7507 elementor-widget elementor-widget-text-editor\" data-id=\"71f7507\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW162480279 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW162480279 BCX0\">Buying an occupied property can be<\/span><\/span><span class=\"TextRun SCXW162480279 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW162480279 BCX0\">\u202f<\/span><\/span><span class=\"TextRun SCXW162480279 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW162480279 BCX0\">very<\/span><\/span><span class=\"TextRun SCXW162480279 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW162480279 BCX0\">\u202f<\/span><\/span><span class=\"TextRun SCXW162480279 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW162480279 BCX0\">different from buying a traditional or vacant property. That is why it is important to understand your responsibilities as the owner. This includes what you need to do as a landlord, and what options your tenants have during the process.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-30a5295 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"30a5295\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5a7a009\" data-id=\"5a7a009\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-516f954 elementor-widget elementor-widget-text-editor\" data-id=\"516f954\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2><b><span data-contrast=\"auto\">Key takeaways:<\/span><\/b><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Occupied REO (bank-owned after foreclosure) properties are homes still occupied by the prior borrower or a tenant. Investors can often\u00a0purchase\u00a0these properties\u00a0below market value.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"12\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Purchasing a house with tenants provides an immediate rental income stream, but there are a few responsibilities that come with that. Now that you are their landlord, you\u202fmust honor current leases and follow local laws, including keeping the building well-maintained and up to code.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">If you want to legally remove a former homeowner, tenant, or squatter,\u00a0you\u00a0can hire the seller\u2019s eviction attorney to continue the eviction process from the point it\u00a0was at\u00a0closing, which can help streamline resolution and reduce delays.\u00a0Investors should budget for potential legal fees\u202fand\u202frelocation\u202fincentives.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-6b7e3157 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"6b7e3157\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-544ef7f2\" data-id=\"544ef7f2\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-656dd8b0 elementor-widget elementor-widget-text-editor\" data-id=\"656dd8b0\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\n<h2 class=\"wp-block-heading\"><b><span data-contrast=\"auto\">What\u00a0Does\u00a0\u201cOccupied\u00a0Property\u201d\u00a0Really\u00a0Mean?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">An occupied property is exactly what it sounds like \u2014 people are currently living in the property at the point of purchase. These occupants could be\u202fprevious\u202fowners or a tenant who may or may not have a valid lease.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">What Does &#8220;REO-Occupied&#8221; Mean?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">The term, \u201cREO-occupied\u201d,\u202frefers to\u202fa\u202freal-estate-owned\u00a0(REO)\u202foccupied\u202fproperty\u202fthat\u202fis\u202fowned by a lender, like\u202f<\/span><a href=\"https:\/\/www.rocketmortgage.com\/\"><span data-contrast=\"none\">Rocket Mortgage<\/span><\/a><span data-contrast=\"auto\">,\u00a0after\u202fit\u202fhas\u202fgone through foreclosure and\u202fis\u202fstill occupied by tenants who rent the property or previous homeowners who have\u202fnot yet vacated the property. Sometimes this could also include unauthorized occupants, like squatters.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The foreclosure process\u202ftypically starts\u202fafter the homeowner\u2019s payments are\u202f120 days\u202flate.\u202fLenders\u202fwill\u202fattempt\u202fto sell the foreclosed property at auction, and if no one buys it, the lender\u202fthen\u202fowns it and can sell it as they wish. However, eviction is\u202fnot included in the foreclosure process and requires an\u202fextra legal\u202fstep. This is what leads to the property still being occupied after it has already gone through foreclosure.\u202fFor buyers looking to\u202fpurchase\u202fan\u202fREO-occupied property, keep in mind that there may be some legal challenges with removing occupants.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">What Does &#8220;Tenant-Occupied&#8221; Mean?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">\u201cTenant-occupied\u201d means\u202fthat a rental property currently has tenants living in it. They are not the\u202fowner\u202fof the property who pays\u00a0the\u00a0mortgage. Instead, they pay rent to the owner\u202fto live on the property.\u202fAn example of tenant occupation is an apartment building or duplex with tenants renting space\u202ffrom\u202fa\u202flandlord.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">When buying a house with tenants,\u202ffirst check if\u202fthe\u202fprevious\u202flandlord\u202foperated\u202flegally. This means verifying ownership through the local tax assessor and checking if the building is currently up to code and is safe for tenants to continue living there.\u202fYou\u202fshould also verify lease agreements\u202fand rent payment statuses\u202fby obtaining estoppel certificates signed by tenants. These help prevent\u202fany\u202fdisputes after the sale.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">What\u00a0Happens\u00a0When\u00a0You\u00a0Buy\u00a0an\u00a0Occupied\u00a0Foreclosure?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">There are rules with\u00a0occupied properties that you may not have\u202fencountered\u202f\u00a0before, including strict non-harassment of tenant laws\u00a0that prohibit you\u00a0from\u00a0illegally\u00a0entering\u00a0the property or approaching\u00a0the occupants until after you\u00a0have\u00a0closed on\u00a0the home.\u00a0Until then, all communication must go through the seller or the seller\u2019s real estate agent.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Once you have\u00a0closed on\u00a0the property, you\u00a0must\u00a0continue to\u00a0respect tenant rights\u00a0under the\u00a0<\/span><a href=\"https:\/\/www.justice.gov\/crt\/fair-housing-act-1\"><span data-contrast=\"none\">Fair Housing Act<\/span><\/a><span data-contrast=\"auto\">\u00a0and the\u00a0<\/span><a href=\"https:\/\/www.occ.treas.gov\/publications-and-resources\/publications\/comptrollers-handbook\/files\/protecting-tenants-foreclosure\/pub-ch-ptfa.pdf\"><span data-contrast=\"none\">Protecting Tenants at Foreclosure Act (PTFA)<\/span><\/a><span data-contrast=\"auto\">, including allowing them to remain until the end of their lease and not intimidate or coerce tenants who refuse to leave or file complaints.\u00a0It is your\u00a0responsibility to go through the\u00a0required\u00a0legal procedures to handle\u00a0current and future lease agreements.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">As with all auction properties, we highly recommend<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">conducting your due diligence before deciding to bid on or\u202fsubmit\u202fa pre-auction offer on an occupied property.\u202f\u202fWe also encourage you to develop\u202fa strategy for compliantly vacating the occupants from the property if you\u202faren\u2019t\u202fplanning to make it a rental.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Here are\u00a0two common approaches depending on your intended use for the property:\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Rental\u00a0Property<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">If you<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">plan<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">to<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">rent the occupied property<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">to the\u00a0current occupants, then the process is\u202fpretty simple.\u00a0Once ownership is transferred, you\u00a0can offer them\u00a0a new lease\u00a0while still honoring their current lease\u00a0until it expires.<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">If\u202fneeded, you can work with\u00a0a real estate agent to\u202fassist\u202fwith\u00a0preparing\u00a0the leasing\u00a0documents.<\/span><span data-contrast=\"auto\">\u202f\u202f<\/span><span data-contrast=\"auto\">\u202f\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Primary Residence\u202f<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">If you\u00a0intend\u00a0to live on the property\u202fas your primary residence, you will need to\u00a0give tenants\u00a0a minimum of\u00a090 days\u2019 written notice\u00a0to vacate.\u00a0This may involve a simple conversation or offering incentives like\u00a0a\u00a0cash\u00a0payment or\u00a0relocation\u202fassistance.\u00a0In some cases,\u00a0a formal\u00a0eviction may be necessary.\u00a0We highly recommend hiring an experienced attorney to guide you through\u202fthe process\u00a0to ensure the process is handled legally and respectfully.<\/span><span data-contrast=\"auto\">\u202f\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">How\u00a0Do\u00a0Evictions\u00a0Work\u00a0with\u00a0Occupied\u00a0Properties?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">The current occupants may not want to leave\u00a0voluntarily\u00a0once you\u202fhave\u202fpurchased\u202fthe property.\u202fAt this point, you may need to\u202fconsider\u202feviction, especially if you\u00a0need\u00a0to\u00a0access the home to\u00a0renovate,\u00a0rent,\u00a0or fix and flip\u00a0the property.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Evictions can be a lengthy process. The landlord must give a vacate notice to tenants before the formal process can even begin. Tenants will need to leave before you can begin any work or\u202fattempt\u202fto monetize the property,\u00a0so\u00a0you will need to\u00a0factor this into your timeline\u00a0if you are buying\u202fa property\u202fthat comes with existing tenants.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Eviction law can be complex and vary\u00a0by\u202fstate. Understanding\u00a0local regulations\u00a0is\u202fvery important\u202fas a landlord. If\u00a0you\u2019re\u00a0unsure about the process, a real estate lawyer can help you through the\u00a0legal steps of an\u00a0eviction process.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Gather\u00a0Any\u00a0Existing\u00a0Records\u00a0on the\u00a0Occupants\u202f<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">When a property is\u00a0occupied, you should gather the necessary documents, such as lease agreements and payment records. There are 5 necessary documents to make sure you have.\u202fIf the lender\u00a0doesn\u2019t\u00a0have these documents,\u00a0request\u00a0the\u00a0contact information\u00a0of\u00a0the\u00a0previous\u00a0property manager or owner.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<ol>\n<li><b><span data-contrast=\"auto\">Lease agreements:\u202f<\/span><\/b><span data-contrast=\"auto\">Signed lease agreements between each tenant and the\u202fprevious\u202fproperty manager or owner that outlines the\u00a0rent amount, duration, occupancy terms, and any\u202fconditions.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Tenant records:<\/span><\/b><span data-contrast=\"auto\">\u202fPayment\u00a0history\u00a0(including prepaid rent and security deposits),\u202fprevious\u202feviction attempts, and information on any past disputes.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Occupancy status:\u202f<\/span><\/b><span data-contrast=\"auto\">Verify if the property is occupied and by whom. This will\u202finform\u00a0you\u202fon\u00a0how you need to handle occupants.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Inspection records:\u202f<\/span><\/b><span data-contrast=\"auto\">Gather property inspection reports on its condition and any damage to plan for repairs.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Eviction history:\u202f<\/span><\/b><span data-contrast=\"auto\">Ask for past and pending eviction filings, including court documents and outcomes, in case you need to take further legal action.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<\/ol>\n<h2><b><span data-contrast=\"auto\">Confirm\u202fWho\u2019s\u202fOccupying\u00a0the\u00a0Property\u00a0and\u00a0Legally\u00a0Remove\u202fThem\u202f<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Once you have the property deed in hand, a daytime visit to meet the occupants is\u00a0an appropriate\u00a0first\u00a0step in the possession-transfer process.\u00a0\u202fApproach the conversation with reassurance, emphasizing that your goal is to ensure a smooth transition and to work collaboratively toward a solution that respects their situation.\u00a0Alternatively, you\u00a0may choose to\u202fsend\u00a0<\/span><span data-contrast=\"auto\">official\u00a0<\/span><span data-contrast=\"auto\">formal written\u00a0notices\u202fand\u00a0await\u00a0their\u202fresponse,\u00a0or\u202fcoordinate the delivery of\u00a0official notices to coincide with\u00a0an in-person introduction.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If eviction is necessary,\u00a0here\u2019s\u00a0how to approach different\u00a0occupant\u00a0types:<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"17\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Former homeowners:<\/span><\/b><span data-contrast=\"auto\">\u202fDepending on your\u00a0state\u2019s\u00a0laws, you may need to serve\u202fa formal\u202fnotice, like a Three-Day Notice to Quit, to vacate before filing a formal eviction case.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"10\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Tenants with leases:<\/span><\/b><span data-contrast=\"auto\">\u202fFor tenant occupation,\u202fyou will need to send them a written notice to vacate\u202fwith a notice period that follows your state\u2019s laws. If they\u202ffail to\u202fleave, an eviction lawsuit is the next step. However, if their lease is valid, you will have to follow your\u00a0state\u2019s\u00a0laws to\u202fterminate\u202fit.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Squatters<\/span><\/b><span data-contrast=\"auto\">:\u202fFirst notify law enforcement by filing a police report to have\u202fofficial\u202frecord for when you send an eviction notice. If they still do\u202fnot\u202fleave after the notice, an eviction lawsuit will be\u202frequired\u202fto enforce the eviction.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:1440,&quot;469777462&quot;:[720,1440],&quot;469777927&quot;:[0,0],&quot;469777928&quot;:[0,8]}\">\u00a0<\/span><\/li>\n<\/ul>\n<h2><b><span data-contrast=\"auto\">Understanding\u00a0Tenant\u00a0Rights\u202f<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Tenants have rights that are listed in their lease agreement and any state and local\u202flaws if\u202fthey are paying their rent\u202fand following lease terms. These include:<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1890,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">How long\u00a0they can\u00a0stay\u00a0in\u00a0their rental\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1890,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Rental payments and any security deposits<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1890,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">Additional\u202fresponsibilities\u00a0outlined in the lease\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">During tenant occupation, landlords\u202fcannot change the terms of the lease\u202funtil\u202fit\u202fexpires, and some laws may even protect the tenant after\u202fthe\u202flease\u202fexpiration\u202fdate.\u202fBut if the tenant is on a month-to-month lease, you have more flexibility to change lease terms with\u202fa\u202f30-day notice.\u202f<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Pros\u202fand\u00a0Cons\u00a0of\u00a0Buying\u00a0REO-Occupied\u00a0Properties<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h2><b><span data-contrast=\"auto\">Pros<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h3><b><span data-contrast=\"auto\">1.\u202fDiscounted\u202fPurchase\u00a0Prices\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">REO-occupied properties\u00a0often\u00a0sell\u00a0below market value, depending on the condition, location, occupancy, and other factors.\u202fBanks\u00a0are motivated to sell quickly\u00a0to recoup their losses from a foreclosure as quickly as possible.\u202fThese properties tend to need significant repairs\u202fand\u00a0may require\u00a0legal\u202fcounsel\u202ffor lengthy eviction proceedings, further lowering the\u202fasset\u2019s\u202fperformance\u202ffor the bank\u202fand pushing them\u202fto sell quicker.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"auto\">Tip:<\/span><\/b><span data-contrast=\"auto\">\u00a0Use\u00a0the\u00a0Xome\u00ae\u00a0free\u202f<\/span><a href=\"https:\/\/www.xome.com\/home-value\/\"><span data-contrast=\"none\">home value estimator<\/span><\/a><span data-contrast=\"auto\">\u202fto\u00a0help\u202fdetermine\u202fthe market value of properties\u00a0to help guide your bidding strategy.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">2.\u202fStrong\u00a0Long-Term\u00a0Investment\u00a0Potential\u202f<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:0}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">The fact that investors\u00a0<\/span><span data-contrast=\"auto\">like you<\/span><span data-contrast=\"auto\">\u00a0can buy\u202fan\u202fREO-occupied property for below the market value makes it a potential cost-effective investment.\u202fIt automatically provides a potential higher profit margin than if you were to buy a property at market value, given that\u00a0you\u00a0complete repairs, renovations, and manage it properly.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Add consistent\u202fmonthly\u202frental income from tenants and appreciation over multiple\u202fyears,\u202fand\u202fyou get significant long-term investment potential. You could also explore multiple income-generating options like short-term rentals, such as vacation rentals and office space, and flip it for a profit when\u202fyou\u2019re\u202fready to resell the property.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">3.\u202fClean\u00a0Title\u202f\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Banks\u202ftypically\u202fclear all outstanding debts tied to\u202fan REO-occupied\u202fproperty before\u202fselling\u202fit, including mortgage liens, unpaid property taxes, judgment liens, title issues,\u202fand\u202fany\u202fother\u202fpending items. This way, you know you are starting with a clean\u202ftitle at the time of purchase.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If you want to protect yourself in the off chance that there could still be preexisting claims\u202fthat you are not aware of,\u202fyou could do a title search or\u202fpurchase\u202fan owner\u2019s title policy before you make an offer\u00a0on\u00a0a property.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Cons<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h3><b><span data-contrast=\"auto\">1. Limited Access and\u202fInformation\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">One of the downsides to\u202fbuying\u202fan\u202foccupied REO property is that\u202fyou will not know the current situation with the occupants until after closing. The occupants could be a former owner refusing to leave, tenants that have valid leases to stay on the property, or difficult squatters that require formal eviction and removal.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Since these properties are occupied, the\u202flender will\u202falso\u202fnot\u202fpermit\u202fany interior inspections, giving you even less information to work with.\u202fYou\u202fwill have to go off the external condition of the property and available public records to evaluate risks.\u202fOld property photos\u00a0from\u00a0past\u00a0Multiple Listing Service (MLS)\u00a0listings,\u00a0along with code violations and\u00a0permit\u00a0records,\u00a0might give you a vague idea of the\u00a0home\u2019s interior\u00a0condition\u00a0but\u00a0they\u00a0are not completely reliable because\u00a0the information may be outdated.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">2. Property Damage Risks\u202fand Costs\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Occupied REO properties are sold as-is, meaning all the risks fall on you,\u202fthe buyer.\u202fSince you\u202fcannot\u202finspect the property before\u202fpurchase, you will have to plan for any unexpected property damage and costs associated with required repairs and updates.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Property damage\u202fcan include:\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Flood and water damage,\u202fincluding mold, basement, and\u202froof (or attic) damage\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Stolen copper wiring and pipes\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Stolen appliances and other valuable items\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"19\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Plumbing damage\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"16\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Vandalism\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Pest infestations and their sources\u202f(tenants could have various sources)\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"18\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Any other damages due to long-term neglect\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<h3><b><span data-contrast=\"auto\">3.\u202fPotential\u00a0Legal\u00a0Issues\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Even though the lender clears all\u202fliens\u202fon the title before you\u202fpurchase\u202fthe REO-occupied property, there are still other\u202flegal issues\u202fthat could pop up.\u202fOccupant removal\u00a0can be legally complex and\u202frequire\u202fa formal eviction process if the\u00a0tenant\u00a0refuses\u00a0to vacate the property.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">As previously mentioned, tenants\u00a0have rights, and\u00a0if you violate lease terms or local laws, they could take legal action.\u00a0You\u202fshould review local laws and seek\u202flegal\u00a0counsel\u202fto handle any disputes smoothly.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Pros and\u00a0Cons\u00a0of\u00a0Buying\u00a0a\u00a0House\u00a0Intended to Rent\u00a0with\u00a0Tenants\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h2><b><span data-contrast=\"auto\">Pros<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h3><b><span data-contrast=\"auto\">1. No Need to Find\u202fNew\u202fTenants\u202fRight Away\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">When you are buying a house with tenants, you do not have to worry about finding\u202frenters since their leases came with the property.\u202f\u00a0The existing renters are already in place, saving you time and money. If leases are nearing expiration, you\u2019ll still have time to plan for new tenants.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">2. Immediate Rental Income<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Since your new home\u00a0already has\u00a0tenants, it also comes with\u202fimmediate cashflow to help cover the mortgage and any other expenses\u202fassociated with the property. The existing renters are already paying their monthly rent and that income starts flowing on day one. If you had to start with entirely new renters, it could take some time to build up a stable recurring income stream.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Cons<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<h3><b><span data-contrast=\"auto\">1.\u202fPossible\u00a0Legal\u00a0Complications\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">As the new landlord, you\u2019re responsible for upholding lease agreements and handling any legal issues. Anything and anyone that is on the property falls under your\u202fjurisdiction\u202ffor handling any violations of the law. If\u202frenters\u202fare not making payments or violating other terms of\u202ftheir\u202flease, you may have to take legal action.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">2. Inflexible Lease Terms<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Even though honoring lease terms\u202fbenefits\u202fthe renter, it could be a disadvantage for you.\u202fYou can\u2019t change lease terms or raise rent until the current lease expires.\u00a0Month-to-month leases offer more flexibility, but fixed-term leases lock you into existing conditions. Be sure to review local rent control laws before making changes.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Common\u00a0Questions\u202fand\u00a0Answers About Buying Occupied Properties\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Buying an occupied property,\u00a0especially for the first time,\u00a0can raise a lot of questions.\u202fConsider exploring\u202four\u202f<\/span><a href=\"https:\/\/www.xome.com\/blog\/due-diligence-buying-real-estate-auction\/\"><span data-contrast=\"none\">due-diligence checklist<\/span><\/a><span data-contrast=\"auto\">\u202fto ensure\u202fyou\u2019re\u202ffully\u00a0prepared.\u202fBelow are some of the most frequently asked questions we hear from clients, along with clear answers to help guide your decision-making.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Will the property be vacant when you\u202fpurchase\u202fit?\u202f<\/span><\/b><span data-ccp-props=\"{&quot;469777462&quot;:[1080],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">The property is often still occupied at the point of purchase, especially if you buy through a\u202f<\/span><a href=\"https:\/\/www.xome.com\/auctions\/bank-owned\"><span data-contrast=\"none\">bank-owned property auction<\/span><\/a><span data-contrast=\"auto\">.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Why would a house be sold\u00a0while still\u00a0occupied?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Occupied homes are sold to investors looking for immediate rental income\u202for because it is a foreclosed REO-occupied property. Buying an occupied house at auction that is below market value also helps maximize profit for investors.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">What happens if you buy a property with tenants?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">After buying a tenant-occupied property, the current tenants\u2019 leases are transferred to you as the new landlord. You are then legally required to honor the current lease terms and renters\u2019 rights.\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Can a landlord evict a tenant because they want to sell the property?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">A landlord\u202fcannot\u202fevict a tenant unless they violate the lease agreement, stop paying their rent,\u202for refuse to leave after their lease has been\u202fterminated.\u00a0Even if a \u201clease termination due to sale\u201d clause is used, eviction must follow legal procedures.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Who handles eviction\u00a0(if\u00a0necessary)?\u202f<\/span><\/b><span data-ccp-props=\"{&quot;469777462&quot;:[1080],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">The responsibility to evict will fall on the new owner after closing.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">What\u00a0legal or logistical\u00a0hiccups\u00a0might arise\u00a0when\u202fpurchasing\u202fan occupied property?\u202f\u202f\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">You can run into unusual situations with any purchase, and they may vary from state to\u202fstate.\u202fFor example, New Jersey law requires carbon\u00a0monoxide\u00a0and smoke certification, which\u00a0requires access to the property.\u202fThe listing agent or seller would need to work with the occupant to gain access and have the inspection completed. If an inspection is not completed, the property cannot change\u202fhands.\u202fOther states may have similar requirements. Always research local laws before purchasing an occupied property<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Can you change the rental agreement after purchase?\u202f<\/span><\/b><span data-ccp-props=\"{&quot;469777462&quot;:[1080],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">It is highly recommended to consult with the proper legal counsel before you take any action. Rental laws can be\u202fvery different\u202ffrom state to\u202fstate\u202fand even city to city. No matter what, it is important to treat tenants with respect and courtesy.\u202f\u202f\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Who\u202fis responsible for\u202frepairing past damage?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Auction properties on\u00a0<\/span><a href=\"https:\/\/xome.com\/\"><span data-contrast=\"none\">Xome.com<\/span><\/a><span data-contrast=\"auto\">\u00a0are sold \u201cas is.\u201d This means the new owner must take care of all repair work needed after closing on the property. Remember, repair and occupancy are two leading reasons that occupied properties sell at lower than market value. The savings can often outweigh\u202fthe\u00a0effort\u00a0and eviction costs.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Occupied properties are popular among investors due to their vast potential. They can be a valuable new investment as a rental, flip, or even full renovation. But as with any real estate investment property, certain risks come with buying a house with existing tenants. Knowing these risks will help protect you from surprises and unexpected costs.\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Do\u00a0homes\u00a0sell\u00a0better\u00a0empty, or\u00a0occupied?\u202f<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">It depends on the current housing market,\u00a0the\u00a0specific property, and the buyer\u2019s needs.\u00a0Occupied homes tend to sell faster,\u202fpartially because\u202fpurchasing\u202fa house with tenants is more attractive to investors.\u202fThey already\u00a0have a recurring income that comes with them\u00a0and the potential to turn a profit quicker than if the home\u00a0was\u00a0vacant.\u00a0\u202fHowever, vacant homes may sell better\u00a0in a\u00a0buyer\u2019s market, especially if the buyer wants to avoid occupants and evictions, or if\u00a0they\u2019re\u00a0an owner-occupant buyer<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"auto\">Conclusion<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"auto\">Occupied properties are popular among investors due to their vast potential. They can be a valuable new investment as a rental, flip, or even full renovation. But as with any real estate investment property, certain risks come with buying a house with existing tenants. Knowing these risks will help protect you from surprises and unexpected costs.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><b><span data-contrast=\"auto\">Looking to expand your portfolio with occupied properties?<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Explore\u00a0<\/span><a href=\"https:\/\/www.xome.com\/auctions\"><span data-contrast=\"none\">Xome\u2019s\u00a0listings<\/span><\/a><span data-contrast=\"auto\">\u00a0and filter by occupancy\u2014just click on More Filters to get\u00a0started!<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">Disclaimer:<\/span><\/b><span data-contrast=\"none\">\u00a0This content is for educational purposes only and does not constitute legal, financial, or investment advice. Real estate laws vary significantly by state and locality. Always consult with qualified real estate attorneys, financial advisors, and local professionals before making investment decisions.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Buying an occupied property can come with more than just built-in tenants. Learn what you need to know about the challenges and more.<\/p>\n","protected":false},"author":2,"featured_media":224,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[12,20,19,13,21],"class_list":["post-222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investor-tips","tag-home-auction","tag-landlord","tag-occupied-property","tag-property-auction","tag-rental"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Buying a Tenant or REO-Occupied House at Auction - Xome | Blog<\/title>\n<meta name=\"description\" content=\"Buying an occupied property can come with more than just built-in tenants. 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