Where the money goes while a non-paying tenant stays
Landlords tend to count what a non-paying tenant costs them as unpaid rent and stop there. The fuller number includes the carrying costs you keep paying, the legal fees if a proceeding is underway, the repairs you make to a unit occupied by somebody not paying for it, and the months of your own attention it quietly consumes.
Against all that, a sale that closes on a date you pick is worth more than a comparison of prices alone suggests. Do that arithmetic honestly before deciding to wait it out.
What a lender does about a non-paying tenant
A buyer using a mortgage needs their lender comfortable, and a lender looks at a property with a non-paying tenant and sees a house it might not be able to take possession of. Most will not lend on it. The buyer who wanted the house cannot complete, and the landlord is back at the start.
We have no lender. The occupancy question is ours to solve after closing, which is why the arrears that ended three previous deals do not end this one.
Why local knowledge changes the number
A house on Kent Place. In Smithtown, bought and paid for by us.
Smithtown is roughly 25,629 people in Suffolk County, ZIP 11787, and the housing stock is mostly colonial, split-level, ranch. Around Main Street and the Smithtown Bull, most of it is old enough that the mechanicals are on their second or third life. The Smithtown stop pulls buyers who commute, which supports the good houses and does very little for the ones that need a roof. We have been buying across Suffolk County for 15+ years. We know what the Smithtown Central School District does to a resale price, which blocks still have oil tanks in the ground, and what a house like yours is actually worth here.
You do not have to get them out first
If a case against the non-paying tenant is already underway, that is not a problem either. A pending matter does not prevent a sale, it needs coordination between the attorneys, and in many cases the proceeding carries on after closing with us in your place.
Tell us what has been filed and where it stands. Your attorney and ours handle the sequencing between them, and nobody asks you to reach the finish line first.
How we help Smithtown landlords with a non-paying tenant
Landlords in this position are often embarrassed and we would rather they were not. A non-paying tenant is not a judgment on the landlord, it is one of the ordinary risks of owning property, and a great many careful owners are sitting in exactly the same place this month.
What we offer is a straight conversation. What the house is worth as it stands, what the alternatives look like, and which professional to call if the answer turns out not to be a sale. None of it costs you anything to explore.
What you do not pay when you sell a house with a non-paying tenant
Every line below is a cost of listing a house with a non-paying tenant the retail way that simply does not arise here.
- Agent commission
- $39,875 at 5% of the Smithtown median none
- Seller closing costs
- About $15,950 on a $797,500 sale. We can cover these. none
- Repairs to make it listable
- Whatever the house needs, paid up front none
- Cleanout and removal
- Paid per load, before a single buyer walks through none
- Carrying costs while it waits
- Taxes, insurance and utilities while you spend 68 to 83 days finding a buyer and waiting for their loan none
Handling the sale without a confrontation
Landlords worry, reasonably, that a sale will provoke a non-paying tenant and make things worse before closing. Nothing we do announces anything. We are not photographing the property for the internet or scheduling weekend showings.
The notice that eventually goes out is a routine one about where rent should be paid, and it goes out after closing, when the property is ours.
What the two paths cost in Smithtown
These are the two routes open to you with a house with a non-paying tenant, priced against what Smithtown houses actually sell for.
Work it against Smithtown's own numbers. The median sale here is $797,500. A 5% commission on that is $39,875, and seller closing costs of about 2% add roughly $15,950. Those are costs we can cover on our side. That is $55,825 gone before anyone counts the repairs it took to get the house listable.
There are two waits in a listed sale and people usually only count the first. In Smithtown the median house takes about 23 days to go from listed to a signed contract. Then it waits again, typically 45 to 60 days, while the buyer's lender orders an appraisal and underwrites the loan. Call it 68 to 83 days from sign to keys, assuming nothing goes wrong.
The part worth understanding is what a signed contract actually guarantees, which is less than most sellers assume. A retail buyer with a mortgage contingency can walk away right up to the end. If they do not qualify, if the appraisal comes in under the price, if they change their mind and let the financing lapse. A share of deals die exactly there, after months of waiting, and the house goes back on the market with time on it. We are not borrowing anything, so there is no lender to satisfy, no appraisal to come in low and no contingency to exercise.
| Listing with an agent | Selling to us | |
|---|---|---|
| Sale price | $797,500 (Smithtown median) | Our written offer |
| Commission | −$39,875 | None |
| Seller closing costs | −$15,950 | We can cover them |
| Repairs before listing | Out of pocket | None |
| Cleanout | Yours | Ours |
| Showings | Until it sells | One visit |
| Listed to signed contract | 23 days (Smithtown median, once listable) | 24 hours to a written offer |
| Contract to closing | 45 to 60 days (waiting on the buyer's lender) | A date you choose |
| Total wait | 68 to 83 days if nothing falls through | Yours to set |
| Can the buyer walk? | Yes (mortgage contingency runs to the end) | No financing to fall through |
| Before repairs and carrying | $741,675 | The number we put in writing |
The listing column assumes a 5% commission and seller closing costs of about 2%. Both vary. We have not subtracted repairs or the cost of carrying the house while it sits, because those depend on the property. A house in good condition listed with a good agent can absolutely beat a cash offer, and we will say so if that is your situation.
Listing a Smithtown house against selling it as it is
If the arrears are recent and the tenant is still talking, the tenancy may be fixable, and listing later with a clean rent roll could net you more. We will tell you when we think that is the situation.
The median house in Smithtown sold for $797,500 and took about 23 days to go under contract, then another 45 to 60 days waiting on the buyer's mortgage. That is 68 to 83 days in total, for a house that was ready to show on day one. The case for selling to us is when the occupancy rather than the house is what stands in the way, which with a non-paying tenant it usually is.
Common questions
Will you buy my Smithtown house with a non-paying tenant in it?
Yes. A non-paying tenant is one of the most common reasons landlords call us. We price the house as it stands and take the arrears situation on ourselves after closing.
Do I have to start an eviction before you will make an offer?
Not at all. Whether starting a case makes sense for you is a question for a landlord-tenant attorney and we can introduce you to one. It is not something we require.
Can I still recover the back rent I am owed?
What a tenant owes you is a claim against that tenant, and it is a separate matter from the sale of the house. Whether it is worth pursuing depends on the specifics, so ask a landlord-tenant attorney for a realistic read.
How long is this going to take?
We can generally close quickly on a house with a non-paying tenant in it, and we can also wait if you need time. What nobody can put a date on is a court matter, which is exactly why selling takes that uncertainty off your side of the table.
Do you need to see inside the Smithtown unit first?
We would like to, and we can work from whatever you are able to show us. A non-paying tenant rarely welcomes visitors, so we plan for that rather than making it a condition.