Buyer wanting to rent before paperwork completed

paddydriver

Hello All

In process of selling as I am executor of fathers estate. Market has been slow and we've got one potential buyer who is offering close to asking and is possibly closing on sale of their place early Nov.

They want to see would we consider letting them rent our property whilst paperwork is sorted between solicitors etc. Have offered to pay booking deposit and circa 10% of buy price up front as guarantee - assuming their story matches up and they close on sale of their property.

Obviously lots of complexities to be considered etc but on face of it would you consider it? My concern is I don't want to turn away a cash buyer and potentially be back on the market and getting less in 3-4 months time, or worse be stuck with it longer; flip side it is its like a "try before you buy" and they drag things out or say they want a reduction for this and that when they get to live in the place.

Any help or guidance much appreciated. Currently talking to solicitor on it and he is cagey.. that said he is our probate solicitor and wondering should I involve a more experienced conveyancing solicitor for this aspect of things.

Thanks
Paddy

I have had the same request from a buyer, I flatly refused. If they are anxious to get in, they will be anxious to complete purchase without delay. If you let them in, the imputes may well evaporate as they are in the house already. My solicitor is absolutely against it.

Dolbhad

I was going to say talk your solicitor as I thought they would advise against it. You have two options - to go down the full above board landlord and tenant route and have a lease in place and rent it out to them. However that’s a lot of hassle and can open you up to any potential claims in RTB. Your second option is a caretakers agreement which is less formal but still a lot or risk. What happens if they damage the property and then don’t buy? I’d refuse to rent it out and hope that puts their skates on to close ASAP.

Has the grant of probate issued? Can you close a sale quickly? If they are cash buyers and you have the grant, it should close quickly.

Del2005

paddydriver wrote: »

Hello All

In process of selling as I am executor of fathers estate. Market has been slow and we've got one potential buyer who is offering close to asking and is possibly closing on sale of their place early Nov.

They want to see would we consider letting them rent our property whilst paperwork is sorted between solicitors etc. Have offered to pay booking deposit and circa 10% of buy price up front as guarantee - assuming their story matches up and they close on sale of their property.

Obviously lots of complexities to be considered etc but on face of it would you consider it? My concern is I don't want to turn away a cash buyer and potentially be back on the market and getting less in 3-4 months time, or worse be stuck with it longer; flip side it is its like a "try before you buy" and they drag things out or say they want a reduction for this and that when they get to live in the place.

Any help or guidance much appreciated. Currently talking to solicitor on it and he is cagey.. that said he is our probate solicitor and wondering should I involve a more experienced conveyancing solicitor for this aspect of things.

Thanks
Paddy

Sounds dodgy to me. Offer near to asking price, then asking move in as a tenant instead of pushing the process.

Getting tenants out is very difficult. If they pull out of the sale you are now stuck with tenants who might be difficult to remove and then you can't sell to anyone else. Do you need 3 or 4 months rent, plus the tax hassle, and the possibility of them overholding?

punisher5112

No way.... Then they don't want to buy and overhold and get a year free.....

Or worse move others in....


Unless this was fully backed and money and full guarantee but with a home this isn't possible....

I'd say it isn't possible and solicitor advised not to and insurance would be an issue.

percy212

If it were me asking to rent while the deal is closed, and you refused, I would be fairly pissed off.

aristotle25

I would not do it. I might be cynical but letting them as tenants gives them bargaining powers.

They may start saying they are short on cash, can you knock €5k off the asking price, then they start finding faults in the property that you as landlord should fix etc.

Too much risk and hassle to me. Stick to a straight sale.

Graces7

No way. I had requests to move in early twice and refused it twice. Once in? How to get them out if it does not go through

It is not their property yet.

No way.

Also I had to wait to move in until the sale was complete; so I rented short term elsewhere.

One of the agents the time I said no assured me that the people were not planning to knock any walls down!

And they then tried to knock the price down for the delay.

Trust no one in these matters.

percy212

percy212 wrote: »

If it were me asking to rent while the deal is closed, and you refused, I would be fairly pissed off.

The fact that you would be pissed off would indicate to me that renting was more important than buying, to you. If you want to get into the house without delay, make sure you have your finance/surveys in order and that your solicitor is told to move things through quickly. If the owner wanted a tenant, they would not be selling.

yabadabado

percy212 wrote: »

If it were me asking to rent while the deal is closed, and you refused, I would be fairly pissed off.

Why ?
Do you want to buy a house or be a tenant ?
If both parties want a speedy resolution then it wont take long for the deal to be done.


OP tell them no straight away. Makes nonsense to let them move in as a tenant.

Graces7

Graces7 wrote: »

No way. I had requests to move in early twice and refused it twice. Once in? How to get them out if it does not go through

It is not their property yet.

No way.

Also I had to wait to move in until the sale was complete; so I rented short term elsewhere.

One of the agents the time I said no assured me that the people were not planning to knock any walls down!

And they then tried to knock the price down for the delay.

Trust no one in these matters.

…...

2013Lara

We rented our house for a year while we waited for our sale to close. The sale was complex though and took 18 months from when we went sale agreed. We lived In a different town and had kids signed up to schools in the new town. We 100% would have pulled out if we weren't let in to rent it first. However, if the shoe was on the other foot and I was selling, I wouldn't do it. It's too messy. And you have a relationship then with the buyer that you probably don't need or want to have.

paddydriver

Thanks all... some really valid points there. Along same lines as my thinking as I am aware about how difficult can be managing tenants these days and the rights that they have; and how long the RTB process can be!

Thinking about it more, and talking to solicitor last night, there are 2 x distinct aspects here - the purchase and the rental; so where does the deposit come from.. is it a rental deposit or a purchase deposit etc. If former then you cannot really include it in the purchase agreement etc.

Question asked re the probate... probate is not completed/issued etc; it is submitted and is going thru but looking at likely another 6 weeks yet.

It is true that if they really want to purchase then they should be prepared to wait and help get all completed as soon as possible; my worry is that with market so slow and no rush of buyers to offer then I am inclined to try work to see whatever can be done to incentivise this person to go thru with the purchase. But my overriding concern is that we are turning it into a "try before you buy" scenario.

My siblings have mixed feelings on it, but I am the one on the ground dealing with everything and I need to weigh all up. I've no reason to think this person is dishonest in any way and I think it is genuine but like has been said, if they decide they don't like the place and have no where else to go then it could get messy.

Going to wait and see if solicitor comes back with more feedback and sit on it over the weekend. Might need to just call the buyers bluff to see how badly they want to buy.

Thanks again for all the help. Happy to have more input too as I am carefully considering all.

paddydriver

2013Lara wrote: »

And you have a relationship then with the buyer that you probably don't need or want to have.

This is indeed exactly what I don't want.. I feel as though I have to be on my best behavior for a few months to keep this person happy and explain all the slightly quirky things about the property etc.. all in the hope they don't decide they don't like it.

K.Flyer

I would say no as well.
If they are as keen as they say and ready to buy they should just be pushing you to get a date to close etc.
They may be caught between two properties but that is not your problem.
What happens if their loan approval falls through or is withdrawn for some reason?
Once they are in then their urgent need is met and they don't need to push you to complete. Once they are "Tenants" for six months then Boom 6 year part 4 tenancy kicks in and you will have more grief on your hands to get them out.
If I was you say No and push everyone to get the sale closed as quickly as possible.
I would think an empty house for sale is better than one with tricky tenants.

Silane

Could you "live" in the property yourself and let them rent as licensees? Then you can kick them out if the sale doesn't go through, and they'll still be motivated to expedite the sale to get you out of the picture so you can't just walk in and out as you please.
I'm not even sure that's allowed, just a thought.

TheChizler

I wonder if it's possible to use the 10% house deposit as the rental deposit, which they only get back once they are no longer in your property. That's solved by them either vacating if the sale falls through (€20k+ is a massive incentive to leave without hassle) or the property no longer being yours, i.e. they complete the sale and the rental deposit used as the purchase deposit. You'd want a very clear agreement written up that the rental deposit will be used against the purchase so you don't actually have to physically return it at the end. Just a thought.

The Student

paddydriver wrote: »

Hello All

In process of selling as I am executor of fathers estate. Market has been slow and we've got one potential buyer who is offering close to asking and is possibly closing on sale of their place early Nov.

They want to see would we consider letting them rent our property whilst paperwork is sorted between solicitors etc. Have offered to pay booking deposit and circa 10% of buy price up front as guarantee - assuming their story matches up and they close on sale of their property.

Obviously lots of complexities to be considered etc but on face of it would you consider it? My concern is I don't want to turn away a cash buyer and potentially be back on the market and getting less in 3-4 months time, or worse be stuck with it longer; flip side it is its like a "try before you buy" and they drag things out or say they want a reduction for this and that when they get to live in the place.

Any help or guidance much appreciated. Currently talking to solicitor on it and he is cagey.. that said he is our probate solicitor and wondering should I involve a more experienced conveyancing solicitor for this aspect of things.

Thanks
Paddy

Personally I would advise against this. If they are in the property they have no incentive to complete the sale, if the value of the house decreases they will look for a lower price. If they are paying rent you are liable for tax on it.

If they are currently renting somewhere and are cash buyers (so not in a chain) the whole purchase process should be quite straightforward and quick.

If you get both solicitors on board it actually could be wrapped up in a month.

the_syco

paddydriver wrote: »

They want to see would we consider letting them rent our property whilst paperwork is sorted between solicitors etc. Have offered to pay booking deposit and circa 10% of buy price up front as guarantee - assuming their story matches up and they close on sale of their property.

What's to stop them from pulling out of the purchase once they're in the door?

BrokenArrows

the_syco wrote: »

What's to stop them from pulling out of the purchase once they're in the door?

Well ideally they would lose the 10% deposit in this scenario, but I'm not sure of the legality of this.

If the 10% isn't at risk then I wouldn't even consider this.