When preparing to list your Edmonton home for sale, the status of your rental furnace might not initially cross your mind. However, selling a home in Alberta with a rental furnace presents specific complexities. Depending on the rental agreement terms, contractual obligations, and potential buyer preferences, a rental furnace could substantially impact your home sale. If you’re considering selling your Edmonton area home with a rental furnace, here’s what you should know.
Challenges of Selling a House with a Rental Furnace
Selling an Alberta property with a rental furnace comes with unique challenges. Below are key points to consider:
Liens Registered on Property
Rental furnace companies in Alberta typically register a security interest against their equipment installed in your home. This creates a lien, protecting the rental provider if the equipment is damaged or the property changes hands.
Unfortunately, homes with liens are generally less appealing to buyers. Liens attach to the property, not the homeowner, meaning buyers inheriting the lien could be deterred from proceeding with the purchase. Additionally, many mortgage lenders in Alberta require a clear title without liens, often mandating lien removal before approving financing. There have been instances where furnace liens rank first on title, forcing the seller to pay them off before the buyer can secure a mortgage. Consequently, buyers might opt to look elsewhere, limiting your potential buyer pool.
Rental vs. Rent to Own Agreements
Most furnace rental agreements in Alberta aren’t structured as rent-to-own. Typically, the rental company retains complete ownership, limiting the homeowner’s control over the furnace.
This arrangement may cause problems when selling your Edmonton area property, as transferring the furnace agreement to a new owner isn’t always straightforward. Prospective buyers might have to secure their own furnace independently, making your property less attractive to them.
Buyer Expectations
Most buyers in Edmonton expect outright ownership of essential appliances like the furnace. Transferring rental agreements to their names is typically undesirable. Instead, buyers frequently prefer that sellers buy out rental contracts prior to closing, thereby leaving a clear title and eliminating the need for further negotiations or installations after moving in.
Impact on Sale Price
The inconvenience of a rental furnace often results in buyers expecting a reduced selling price. In addition to considering market conditions in Edmonton, buyers factor in anticipated costs and inconveniences they will incur after the purchase.
Handling furnace-related issues, such as contract transfers, buyouts, or installations, requires additional effort from buyers. This perceived hassle usually results in lower offers, impacting your final sale price.
Benefits of Selling a Home with a Rental Furnace
Despite challenges, there can be advantages to selling a home with a rental furnace. With rent-to-own arrangements, you can upgrade your home with a newer, more efficient furnace model without immediate, substantial costs upfront. As long as the agreement is fully paid out by the time you close your sale, you can leverage these improvements without straining your finances.
Furthermore, proceeds from your home sale can often cover the furnace buyout cost. Many furnace rental companies in Alberta allow for such arrangements, enabling sellers to avoid paying upfront.
How to Sell Your House with a Rental Furnace
If you plan to sell your Edmonton area house and it has a rental furnace, approaching it strategically is crucial. First, verify whether a lien exists against your property and decide whether you’ll resolve it prior to closing or expect the buyer to handle it.
Second, determine the cost of terminating your rental contract. For rent-to-own agreements, the payoff is usually clear and manageable. For traditional rental agreements with buyout options, however, fees for early termination can be substantial. Engage your rental furnace company directly for detailed figures.
Purchasing the furnace outright can significantly simplify your home sale, ensuring a clean title. Ensure any existing lien is removed once payment is made.
If selling with the rental contract intact, clearly communicate this in your property listings. Transparency ensures you attract buyers comfortable with assuming rental agreements.
How We Can Help
Edmonton House Buyers can help you navigate selling your home stress-free, even with a rented furnace. We purchase homes as-is, saving you from typical real estate sale hassles and expenses. Our team is capable of buying homes with rental furnaces in place, and is also able to coordinate furnace buyouts at closing when applicable. We are the #1 We Buy Houses company in Edmonton that is super flexible, doesn’t charge any commission, and can close fast.
If you’re considering selling your Alberta home with a rented furnace, contact Edmonton House Buyers today!