It doesn’t happen often, but every once in a while would-be buyers run across a house for sale that also comes with a tenant.

Sometimes, the seller wants to holdover. Other times, a renter occupies the place and still has time left on their lease before they must skedaddle. Either way, the sale requires some special handling.

When the seller wants to stay, they become your tenant and should be treated as such. That means a lease, or at least an agreement stating, among other things, their exact length of stay.

There are good reasons sellers want to remain beyond closing. Perhaps they are moving to a new house that is still under construction and not ready for occupancy. Possibly the seller of their new place needs some extra time of their own, or maybe the seller hasn’t even found another house yet.

There’s also a good reason why a buyer will allow a seller to stay on. Such an offer might sweeten the pot just enough for the seller to choose your offer over someone else’s. And if you offer to allow them to stay rent-free, your offer becomes even more attractive.

Whatever the reasons, both buyers and sellers should tread lightly. And for the protection of each side, everything should be reduced to writing -- perhaps with the help of a real estate attorney or at least that of an accomplished real estate professional.

“As long as there is agreement up front on terms, conditions and price, it can work well for both parties,” says Jeff Dowler of eXp Realty in Carlsbad, California, who has done several such transactions.

The deal’s term can be anywhere from a few weeks to two years. But Donald Payne, the broker-owner of Vision Realty in Columbus, Ohio, warns that anything longer than 60 days could louse up your financing. After that, the lender may consider the house an investment property that calls for a higher interest rate and more stringent terms.

Payne also suggests calling your contract “a post-possession licensing agreement” rather than a lease. Otherwise, because of strong tenant-rights rules, it will be more difficult to evict the seller should that step become necessary.

It’s an entirely different ballgame when the house you are buying is occupied by someone who still has time left on their lease. How you treat them will go a long way toward making your step into landlording successful or not.

As noted above, buying a tenant-occupied house moves you into the realm of investor financing. At the same time, though, the extra income could help you qualify for a mortgage.

But realize that the tenant didn’t sign up for this. They didn’t know their life was going to be interrupted time and again so the house -- their house -- could be shown to would-be buyers.

If there is a written lease in place, you as the new landlord have to abide by it. That means you can’t raise the rent, you are responsible for major breakdowns and you must give proper notice that they’ll have to move out when the lease expires.

If the tenant decides to become uncooperative, your foray into property management can be disastrous. In some places, it can take months to remove a tenant. So tread lightly.

One of the best ways to keep a tenant happy is to cut them a break on their rent. How much is up to you and your financial situation. But if they have only a month or two left on their lease, you just might want to tell them they don’t have to pay anything at all. You might even offer to help pay for their move. And make sure they know you intend to return their security deposit in full.

If the tenant still has more than a few months to go, you can wait until the lease expires or you can employ the same tactics above to try to persuade them to leave early. But if they won’t budge, try to keep your relationship with them as amicable as possible. The last thing you want is to ruffle their feathers, especially in states where tenants have the upper hand under the law.

The key is to maintain an open line of communication. “The best approach,” advises Eric Michael, an agent with Remerica Integrity in Northville, Michigan, “is to make sure that everyone is on the same page.” And Mike Yeo of 3:16 Team Realty in Frisco, Texas, agrees. “The tenant needs to know what’s going on.”

Sometimes, though, even a well-informed tenant can become a problem. Bill Somerset of RE/MAX in Dover, New Hampshire, has been involved in the sale of a tenant-occupied house only once, and it didn’t work well. “The tenant stopped paying rent, so we had to go through the eviction process.”

The bottom line is to do your homework before proceeding. Obtain a copy of the lease, read it and make sure you understand your rights and those of the tenant.

If you end up buying the place, you are assuming the seller’s responsibilities as a landlord. As long as they pay their rent, the tenant has the legal right to remain until the lease is up and you give proper notice that you do not intend to renew. You cannot remove the tenant just because you want to live there.

Homebuyers who focus solely on the cost of their mortgage's interest and principal are doing themselves a disservice. There are other recurring costs that should be factored into the decision.

Some people call them "hidden" costs, others say they're "ignored" and still others says they're simply "forgotten." But whatever name you choose, they're real and they are mounting.

These costs can add $1,180 to the top of each month's payment for a typical house, according to a recent survey by Zillow and Thumbtack.

Two costs often ignored by buyers are insurance and property taxes, likely because they are usually included as part of the monthly payment -- hence the acronym "PITI," which stands for principal, interest, taxes and insurance. In a fixed-rate mortgage, the amounts represented by those first two initials (principal and interest) do not change over the loan's term. But the "T" and the second "I" (taxes and insurance) do change -- they mostly go up, often annually.

Take property taxes, which are the primary means by which state and local jurisdictions pay for the services they provide their citizens, accounting for more than a third of their total receipts.

Some $174 billion in taxes were paid by property owners in the first quarter of 2023, the Census Bureau reports. Moreover, growth has accelerated substantially in each of the previous four quarters, quadrupling since the first quarter of 2022.

Property tax revenue is catching up to home values -- and in a hurry, says David Logan, an economist with the National Association of Home Builders.

Property taxes are inescapable if you don't want a lien placed on your house. And unless you want to tempt fate, you'll need homeowner's insurance for protection against fire, theft and major disasters. (If you have a mortgage, insurance will be required, anyway.)

The decisions by some major insurance companies to leave California and Florida have opened the door for other insurers to up the ante. One Miami homeowner reports that his insurance premiums are more than double his property taxes because of the cost of windstorm coverage.

The Insurance Information Institute tells me the average home insurance premium has increased 11% over the past year, to $1,700 annually. Florida homeowners have experienced the highest one-year average increase: a jump of 42%, up to $6,000 a year.

Homeowners association dues are often forgotten until the first bill arrives. Almost a third of all housing is governed by HOAs or community associations, as is more than three-quarters of all new construction, reports the Foundation for Community Association Research.

Just like taxes and insurance, HOA dues are unavoidable; you have to pay whether or not you use the pool, play golf or hang out in the clubhouse. About a third of homeowners reportedly pay between $100 and $300 a month in dues. And because HOAs' costs are rising, just like everybody else's, dues are continually marching upwards. Two-thirds of associations reported increasing their assessments in 2022, and 84% expect to increase them in 2024.

It's important to note that if HOA dues don't keep pace with other rising costs, the property could go downhill. For example, dues in my small neighborhood have never, ever been raised -- and now we can't afford to repair the community basketball court or fix and power-wash the entryway fencing. A big jump in dues is in the offing.

Then there's utilities. These costs vary with your property's location, age and size, as well as the number of occupants. According to figures developed by the National Association of Home Builders using data from the Census Bureau, fuel (electricity, gas, etc.) runs about $2,500 per year, while water and trash cost $845 per year, combined. And that was in 2021.

Move.org, a site that matches people to household moving companies, has a more detailed breakdown of average utility costs: $117 a month for electricity, $45 for water, $62 for natural gas, $66 for sewer, $60 for internet, $48 for streaming services, $114 for mobile phone service and anywhere from $25 to $100 for trash. That a total of at least $537 for everything on the list.

What about the costs for projects around your house? Improvements are discretionary, but maintenance is necessary, and costs vary widely by location. More than half of the first-time buyers polled by U.S. News and World Report said they encountered unexpected repairs to be done after moving in.

Thumbtack calculated the estimated annual costs for home maintenance, based on what it considers 17 "essential" annual projects. Nationwide, the average cost is $6,413. Adjusted for location, though, the prices range from a low of $3,467 in Las Vegas to a high of $8,639 in Los Angeles -- more than a $5,000 difference!

"What I find frustrating," said one Tennessee homeowner, "is how fast things like appliances fall apart and head for the dump. If someone tells you the washing machine will last 10 years, don't believe them."

Years ago, my oldest son (by five minutes) was in the middle of buying his first house when the state announced a program that offered below-market mortgage rates for first-timers who met certain qualifications.

When I mentioned I thought this was something worth looking into, he rejected the idea, saying he already had his financing lined up. But I insisted, arguing that he might be able to significantly cut his monthly payment -- an important point for any young family buying their first house.

He ended up securing the lower-cost loan and saving $100 a month. And since he lived in the place 10 years, he pocketed $12,000 overall.

I tell this story because, according to a new report from the Consumer Financial Protection Bureau, all buyers, not just rookies, can save a significant amount of money if they shop for the best deal on their mortgage.

How much can they save? Around $100 a month, says the report.

The study found that rates differ between lenders by as much as 50 basis points. (A basis point is 1/100th of 1%. So 50 basis points equals 0.5%). In lender parlance, it's called "price dispersion," and it exists for practically every type of mortgage, from government-backed loans to those in the private market.

Based on the 2021 loans it looked at, the CFPB said that a $300,000 mortgage at a fixed rate of 3% for a 30-year loan would cost $1,265 per month. (That's for principal and interest alone, not taxes and insurance.) But if the rate bumped up to 3.5%, the payment rose to $1,347 -- a difference of $82, or a 6.5% higher payment.

"The math remains similar" using today's higher rates, say the report's authors, Alexei Alexandrov and Elizabeth Saunders, and the results can have an even bigger effect. At today's rates, for example, a half-percent difference on the loan described above would result in a $100 higher payment -- $1,896 at 6.5% vs. $1,996 at 7%.

"In a higher interest-rate environment, with monthly payments being much higher overall, this $100 a month difference might matter even more as borrowers potentially are more stretched to make ends meet," Alexandrov and Saunders wrote.

The CFPB report confirms what LendingTree and others have been saying for ages: that buyers who take the time and effort to price-hunt could cut their monthly outlays by quite a bit.

Last summer, LendingTree reported that borrowers who shopped around could save an average of $63,151 over their loans' 30-year terms, which breaks down to about $175 a month. The reason: price dispersion. Across the 50 metro regions the company studied, the average spread between the highest and lowest rates offered to borrowers was 82 basis points, or almost a full percentage point.

Why such a wide range? Each lender has its own set of criteria concerning the risks it is willing to take. The greater the risk it assumes by lending to you, the higher the interest rate. And since one lender might find you riskier than another does, it pays to shop around.

Unfortunately, homebuyers shop far less for a mortgage than car buyers do for their favorite makes and models. Fannie Mae, the government-sponsored enterprise that buys loan on the secondary market, says more than a third of consumers receive just one quote before picking a lender.

But Zillow says the number is much higher. In its own 2022 study, the listing portal found that almost three-quarters of prospective buyers had not shopped for a loan and had no plans to do so. By comparison, 28% said they spent "at least a month" researching their vehicle purchases, and 23% spent that long before booking a vacation.

The reasons people don't shop around for a mortgage? Thirty percent told Zillow they feared it would hurt their credit, 24% were happy with the first lender they contacted, and 19% didn't want to spend the extra time.

To be clear, shopping for a mortgage can potentially affect your credit, but in a limited way: "Buyers can shop and submit multiple applications over 45 days with only one hit to their credit score," says the Zillow report.

When you do decide to compare mortgages, don't pay any attention to the interest rates you see in national headlines. All lenders calculate their rates based on local conditions, and rates often change daily. Contact at least three lenders, asking each for a written quote. Make sure they are all talking about the same kind of mortgage -- a 30-year fixed-rate loan, for example, or perhaps a government-backed loan with a low down payment.

Remember to compare more than just interest rates: Take a hard look at the fees each lender charges. These will impact the overall cost of your financing and will be calculated as part of the annual percentage rate you will be quoted. The APR is itself another good comparison tool.

Make sure the estimates reflect the loan you discussed and that the rate you are being quoted is guaranteed, or locked in -- and for how long. If it's not locked in, it can change at any time before you reach the closing table. If it is, ask exactly how long you have until it expires.

Also, look for any mention of a prepayment penalty, which is a fee for paying off the loan early. If your loan has such a clause, you'll owe the lender more than the balance of your loan when you pay it off, whether by selling the house or refinancing the loan.