Buying property I'm renting?

Bern14

Hey All

Just looking for some advice really.

We have been renting a house for the last 6 years, our landlords are amazing, this used to be their house, they really cared for it and we have been the ideal tenants for them. They're a lovely couple in late 60s/early 70s, some health problems and definitely not the money-grabbing type.

They have hinted before that they don't want the hassle with renting again after us (they'd been burned before) and they'd rather sell it. I literally haven't seen them maybe once since we moved in. Never bother them only when necessary. They love us and our rent has been below market rate for years.

We got to a point where we have the funds to buy and I'd like to approach them about buying the place. How would you go about that?

I guess, my plan is to ask if they would sell and if so I'd like to put in the lowest offer possible to negotiate from or would you ask them what the asking price would be first?

We are quite comfortable here and not in a hurry to move since we're paying less or about the same as mortgage but it's someone else's obvs, but I don't want to spook them and think they have to sell and then get outpriced in the end.

I guess I just need to go talk to them but any advice would be great if you've been through this or a landlord yourself about broaching the subject. Does this kind of transaction happen in real life? It would literally be the easiest transaction of their life but is it a time to sell for landlords? I'm confused by this market especially during COVID.

Thanks!

Buddy Bubs

Ask about their interest in selling to you first, you don't need to put offer in straight away.

Bern14

Thanks, that's good advice. I can get too much in my head and complicate things when they're really simple. haha

the_syco

Bern14 wrote: »

I guess, my plan is to ask if they would sell and if so I'd like to put in the lowest offer possible to negotiate from or would you ask them what the asking price would be first?

Get a surveyor to look at teh house; there may something costly that you haven't found out yet.
Check what mortgage you can get.
Ask them how much they'd sell the house for.
If less than the amount you're approved for, lightly haggle (so they don't think that they should've said more).
If above the amount that you're approved for, haggle hard.

the_syco

the_syco wrote: »

Get a surveyor to look at teh house; there may something costly that you haven't found out yet.
Check what mortgage you can get.
Ask them how much they'd sell the house for.
If less than the amount you're approved for, lightly haggle (so they don't think that they should've said more).
If above the amount that you're approved for, haggle hard.

Don’t haggle hard. The best way of driving the owners towards putting the house on the open market is to piss them off by offering way below what the believe it is worth. Your aim should be making your offer good enough that they don’t consider advertising it.

Op, the owners don’t love you, they met you once in six years. Selling this property will be their last windfall, so don’t rely on any emotional consideration. It is going to come down to money, particularly if they have family. Best you can do is ask if they will sell and how much they want, then if you want to buy it, offer as close to it as possible so others don’t get an opportunity to bid.

CollyFlower

Don't offer below what it's worth, offer the market value, it would just look greedy if you offrerd below, after all they've been generous with you over the years by not increasing the rent.

dennyk

As others have said, offer a decent fair market price if you're keen to buy the place. In a buyer's market, you might be able to haggle a decent discount on account of the quick sale and the lack of hassle and expense in listing and showing the place to a bunch of prospective buyers and lookie-loos for months before getting a reasonable offer, but in the current market, unless there's something very wrong with the place, they could throw it on Daft and probably have several desperate buyers trying to outbid each other and end up selling it for more than estimated market value in no time at all. If you lowball 'em, you're going to end up in that bidding war yourself and if you even got the place at all you'd likely pay a fair bit more than you'd planned.

CiboC

OP, this is exactly what we did last year, we bought the house that we had been renting for 8 years from our landlord.

They had mentioned the possibility a few years ago but then dropped it but then, out of the blue in 2019, they approched us again and asked if we wanted to open negotiations.

We agreed to proceed by getting in 3 different estimates of a sale price from 3 different estate agents. Our landlord lived abroad so we got the estate agents in by pretending it was our house (with the landlord's agreement!) and we wanted to sell it.

That put a framework in place for a price range, and we then got a surveyor in to do a report which we sent to the landlord. It took a lot longer then we thought, partially due to the fact that they had a somewhat unrealisitic expectation of what they would get for the house. They bought it at the absolute height of the mid noughties bubble.

Eventually though all the i's and t's were dotted and crossed and we 'got' the house last summer. Moving was pretty easy...:)

I would suggest you make sure you have a good idea of what the market value is and that you could pay it before approaching them, and then just ask them would it be something they would consider.

From their perspective they would save on estate agents fees by selling to you directly and also save on any expenses they might incur in getting the property ready for sale, so there would be a certain attraction to the idea for them as long as you don't try to lowball them too much.

Bern14

CiboC wrote: »

OP, this is exactly what we did last year, we bought the house that we had been renting for 8 years from our landlord.

They had mentioned the possibility a few years ago but then dropped it but then, out of the blue in 2019, they approched us again and asked if we wanted to open negotiations.

We agreed to proceed by getting in 3 different estimates of a sale price from 3 different estate agents. Our landlord lived abroad so we got the estate agents in by pretending it was our house (with the landlord's agreement!) and we wanted to sell it.

That put a framework in place for a price range, and we then got a surveyor in to do a report which we sent to the landlord. It took a lot longer then we thought, partially due to the fact that they had a somewhat unrealisitic expectation of what they would get for the house. They bought it at the absolute height of the mid noughties bubble.

Eventually though all the i's and t's were dotted and crossed and we 'got' the house last summer. Moving was pretty easy...:)

I would suggest you make sure you have a good idea of what the market value is and that you could pay it before approaching them, and then just ask them would it be something they would consider.

From their perspective they would save on estate agents fees by selling to you directly and also save on any expenses they might incur in getting the property ready for sale, so there would be a certain attraction to the idea for them as long as you don't try to lowball them too much.

This is great, thanks so much for sharing. This is exactly what I was after, someone who went through this.

I have been doing extensive research on *sale* not *asking* prices in the area and I know what's a fair price, I wasn't going to insult them with something ridiculous but to your last point, there is a certain advantage for them so want to negotiate the best possible price for us. And would absolutely do a surveyor report, was planning on that no matter what.

Thanks again for sharing your experience!

Bern14

the_syco wrote: »

Get a surveyor to look at teh house; there may something costly that you haven't found out yet.
Check what mortgage you can get.
Ask them how much they'd sell the house for.
If less than the amount you're approved for, lightly haggle (so they don't think that they should've said more).
If above the amount that you're approved for, haggle hard.

Thank you, was planning on surveyor for sure, the house hasn't been renovated in over 15 years, it definitely needs some TLC but I think structurally sound, but would want professional opinion of course.

Bern14

Dav010 wrote: »

Don’t haggle hard. The best way of driving the owners towards putting the house on the open market is to piss them off by offering way below what the believe it is worth. Your aim should be making your offer good enough that they don’t consider advertising it.

Op, the owners don’t love you, they met you once in six years. Selling this property will be their last windfall, so don’t rely on any emotional consideration. It is going to come down to money, particularly if they have family. Best you can do is ask if they will sell and how much they want, then if you want to buy it, offer as close to it as possible so others don’t get an opportunity to bid.

Ok, love may be a bit of an exaggeration, but there are many forms of that. Do Xmas cards count? I often say I love our landlords. Why? Because I had ****ty ones so I appreciate them, they're good, decent people. We made each other's lives much much easier for the last 6 yrs, me paying their mortgage, them not having to spend money, time or energy on their asset and they kept the rent at a fair price, they're by the book. So whereas I understand this is all a business transaction, so this all may not matter, we can still appreciate one another.

But seriously I wasn't going to throw an unrealistic sum of course, I've done extensive research on sale prices in the area since 2015 that's why I'm confident in approaching. I'm the worst at haggling anyway so will probably end up paying more than I should.

Thanks for your perspective! Have a great day!

Bern14

dennyk wrote: »

but in the current market, unless there's something very wrong with the place, they could throw it on Daft and probably have several desperate buyers trying to outbid each other and end up selling it for more than estimated market value in no time at all. If you lowball 'em, you're going to end up in that bidding war yourself and if you even got the place at all you'd likely pay a fair bit more than you'd planned.

This is what I'm concerned about. The lack of supply in current market and people with more savings due to having no life for the last year is making people crazy on spending more on properties that are just not worth that much. I have done my research in the area so I know what a fair price is so I'm just hoping to keep it within that reality not whatever craziness is happening in the market right now. Thanks for your reply!

Bern14

CollyFlower wrote: »

Don't offer below what it's worth, offer the market value, it would just look greedy if you offrerd below, after all they've been generous with you over the years by not increasing the rent.

Maybe I didn't express myself right, I was of course going to offer within the - already crazy - market price range but start from the lower end. I know they'd laugh in my face if I went in with something ridiculous. And, yes, they've been generous, but really it's because they're decent people but we have been too, we have looked after their asset like our own home, so it's a two-way street, I believe, and they know it! Thanks for your response!

ciaranb115

I might be too late to this party, but just to play devil's advocate, if I was the owner of the property and wanted to sell, the best I would do for the sitting tenants (even if they were the best tenants ever) is give them last right of refusal. So I would put the property on the market, do viewings, get offers, and then allow the sitting tenants to match the best offer.

Ray Palmer

Bern14 wrote: »

Ok, love may be a bit of an exaggeration, but there are many forms of that. Do Xmas cards count? I often say I love our landlords. Why? Because I had ****ty ones so I appreciate them, they're good, decent people. We made each other's lives much much easier for the last 6 yrs, me paying their mortgage, them not having to spend money, time or energy on their asset and they kept the rent at a fair price, they're by the book. So whereas I understand this is all a business transaction, so this all may not matter, we can still appreciate one another.

You never once paid their mortgage, you paid for a service and got it. They left you to your own devices rather than checking the property. I have a tenant who is delighted with the owner as they never bothered him. No hassle to the owner. He is actually dangerously altering the property but he is happy.

I am sure you are happy but it amounts to a certain amount on neglect on the owners side. Can work out but not advisable to act this way as a landlord.