Discount on sale price for tennants

allibastor

All,

What are the thoughts on this,friend of mine living in limerick, a renter, is buying the house he is renting.

He said he asked for a discount for being an existing tennant of 3.5 years.

Is this the norm?

ted1

allibastor wrote: »

All,

What are the thoughts on this,friend of mine living in limerick, a renter, is buying the house he is renting.

He said he asked for a discount for being an existing tennant of 3.5 years.

Is this the norm?

If you were selling a property would you offer a discount, I think the answer would be a big hell no. If anything I'd increase the price as I know they want it and the convinence of staying where they are suits them

L1011

Its not unheard of but it's by no means common. Guaranteed no chain but that's the only advantage

allibastor

ted1 wrote: »

If you were selling a property would you offer a discount, I think the answer would be a big hell no. If anything I'd increase the price as I know they want it and the convinence of staying where they are suits them

Am, ok. I suppose same could be said of no hassle in moving tennants?

the_syco

Tell your mate to get a survey done. Since they're already living there, it'll be easy to get done. If something is found, it could help lower the price, or make your mate think twice about bidding on the property.

Peregrinus

L1011 wrote: »

Its not unheard of but it's by no means common. Guaranteed no chain but that's the only advantage

It also means that the vendor doesn't have to get vacant possession before putting the house on the market, or put the house on the market with a sitting tenant. Plus of course he can continue to collect rent right up until the day the sale is closed. These are both advantages that accrue to the vendor when selling a house to a sitting tenant. In the scheme of things, they're not huge advantages, though.

Stoner

The only way this would work is if the property was hard to sell imo and you knew the price it would sell or he'd sell it at.

If the market is rising you'd find it hard to get a benchmark

I remember years ago I knew someone in this situation as the owner. The value of the property was rising as the tenant continued to negotiate for a better rate.

Same thing happened to another friend, had a place, the tenant asked could he buy the place, he said OK, then he started to argue about the market rate. Comparing it to houses that were in bits brought his parents in to negotiate with him.
The friend started looking for the next property. Identified one and made a move. Then the tenant couldn't get a loan. Friend sold it in three weeks, tenant didn't want to move then.
In both cases the discount they wanted far exceed the total amount of rent they paid.

Imo without being unfair to bidders you'll never get the value of the place to discount down, but the best you could hope for imo would be to match the best price, but that's hard to get.

But that's different if it's proving hard to sell but will only sell for a known rate.

exaisle

If the house is being sold at what the vendor considers the true market value, he could be justified in offering a small discount because he's saving estate agent (and more significantly, advertising) fees.... They're probably going to run to a few thousand....

The_Conductor

It all depends on location- and how easy the owner may find it to sell the property to another party.

In the case of private sales- it is virtually unheard of for a sitting tenant to get a discount on the open market selling price- just because they are a tenant- in the public sector- there were schemes up until 2 years ago- where council tenants could get a discount on the market price of the property- based on the duration of their tenancy (nothing at all for under 10 years- going all the way up to a 40% discount for long term tenants). This scheme was effectively closed off 2 years ago (with a few well publicised exceptions) as councils were not replacing the housing stock they were disposing of...........

Is it normal or usual for a tenant to get a discount on the sale price- no, it most certainly is not.

A small discount could be negotiated, not because your friend is a tenant but if for example the vendor did not need to hire an estate agent or pay advertising costs. Also your friend know the house well he could give an assurance that he won't be raising silly issues resulting from surveys etc. In addition if the landlord knows he has available funds, he may be prepared to give a your friend a small advantage over a complete stranger. Its all about negotiation; your friend might get a small discount if the above applies, but if he pushes for too much the landlord might go for a full open market sale.

Ray Palmer

Stoner wrote: »

In both cases the discount they wanted far exceed the total amount of rent they paid.

I have heard very similar from friends. There was a spate of tenants offering landlords really low prices for property because they they could get a cheap deal.
Had a tenant TELL me he was going to buy the house. I told him I wasn't selling so that would be hard to do.He then went on about he had the right to buy the property as he had lived there 7 years. Rather than explain to him I told him to get mortgage approval and make an offer and we would discuss it. A few weeks later another tenant rings me up asking did the other guy now own the property.
He had told the other tenants I was selling the property to him at a huge discount and he would be kicking them out. Assured them this was not the case and if he said it again ring me and then hand him the phone. An hour later get a call from one of the tenants who passes the phone to him. He starts acting like I was his beast bud and that he will have all his paper work to my solicitor tomorrow. He then hung up. I rang back and got put on speaker. Made it certain that I would not be selling and that he was lying. He started going on about how we made a deal. It was all very strange, so I said I'd call down. Looked up contacts I had for his family and contacted them because I was both worried for him and scared for the tenants. Spoke to his brother and said I was concerned for his mental health and the brother instantly acknowledged there were issues and came down with me.
It was all very distressing as the guy started claiming that wasn't his brother, I was an imposter etc... He got his help and was back to normal a few weeks later. The other tenants wanted him out (all seperate places) but I refused saying he was just a bit sick and was back to normal. Let them all move out mid leases as they had started exaggerating saying he was a danger could kill them in their sleep.
The joys of being a landlord.

Michael D Not Higgins

Ray Palmer wrote: »

The joys of being a landlord.

Part time social worker, part time housing charity.