Accidental Landlord? No...Stubborn Seller

Home sellers can be a prickly group. This is especially true when markets are shifting, like now as sellers lose the edge and the market balances (mid-summer ’25). The trendy label is "accidental landlord", but an accidental landlord is nothing more than a stubborn seller. They don't listen, they know best. Their home is the “exception”; they have the one that all the buyers will flock to. Data? Meh, that’s for the others, not them. They know what the house is worth, just ask them. They are "experts".

With over three decades of full time sales and appraisal experience, I’ve heard some remarkably dumb things from sellers; and by extension, their agents. I’ve witnessed levels of stupidity that make no sense, listening as seemingly educated people literally light piles of money on fire. Don’t be one of these sellers. Don't take one of the "Triple Crown of Dumb" positions that we hear…

I’ll Rent It

Oh, that’s genius! The MSM designated “accidental landlord”; there's no accident here. The logic here is that whatever the reason that the home failed to sell will be rectified at some point down the road; a year, two, or more. What could go wrong? This assumes that the seller:

• Understands what's involved in being a landlord
• Understands the legal and financial sides of this
• Knows they can legally rent it (OK with HOA, mortgage company, insurance)
• Are OK with required updating post rental
• Know/believe renting will allow the market to swing back to them
• Justify the expenses and effort in their mind, but rarely with logical and cogent data

We touched on this about two years back, this is worth 55 seconds.

Renting a home with a mortgage taken as a primary residence is mortgage fraud. I have personally seen HOA's shut this idea down, suing owners when someone ratted them out. Attorneys share multiple horror stories about lawsuits and injury claims for damages against clueless owners. Insurance companies will cancel policies and deny claims as rentals and primary residences are two different animals. As for the accounting side...don't underestimate the cost and requirements. This is an absolute Hall of Fame level of stupid and usually trumpeted by sellers that are exceptionally frustrated and feeling “exposed” as their home languishes. We’re seeing a lot of this from buyers that acted recklessly during the crazy 3% post pandemic period. You overpaid – by a lot – here come the roosting chickens. You might lose money, you will definitely lose more rushing into a rental posture.

I Paid, I Put In, Zillow Says

Speaking of chickens coming home to roost…explain how what you paid or what you put into a home matters? Zillow says? The company that lost almost $1B trying to flip homes, that Zillow? The market when you list your home determines what it is worth, nothing else. A ready, willing, and able buyer is going to evaluate the home with the help of a seasoned buyer’s agent. They are considering comparable homes, not what you paid or that you spent 150K on landscaping. What did other similar 4BR/2.5B 2400SF ranch homes built in 2000 sell for over the last year? What does the data say?

Of course, appealing homes will demand more but use your head. Simply put, you don’t want to be the most expensive home in the neighborhood. A home is worth what others like it in the competing area are selling for. We stress this with every buyer, because one day…. we don’t want to hear them saying “I paid…I put in…Zillow says”.

I Don’t Have to Sell

Brilliant! Go through the process of prepping, listing, showings and all the other nonsense while knowing that you “don’t have to sell”. Huh? Then what was the point of this? To “test” the market? This response is stupid X2 when the owner of a VACANT home drops it. That champ is fine carrying the payments, taxes, and utilities, while hoping the vacant home isn’t targeted by squatters, partiers, or a pesky falling tree or fire. Or, that an icemaker line, toilet, condensate pump issue doesn’t result in a leak that goes unnoticed and results in mold. “I don’t have to sell”; after all, it’s not like vacant homes are the Devil’s workshop or anything.   

Sellers are usually the last to respond to changing markets, this is very much in evidence over the last 24 months. Many – not all – of these sellers were buyers during the frenzy and are now facing the potential of selling for less than they paid. There’s nothing that can be done about that, sellers must deal with the market they are in. While they can’t control that, they can control how they react to it. When reality hits, it’s best to make the hard decisions and move on. Don't be a venditore testardo, don't be an accidental landlord, listen to your agent and acknowledge the data.

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