Buying the property you rent as a tenant

lizards · 25 January 2015 at 11:59PM

Thanks all! Sounds like it is something that does happen fairly often - that's good to hear. Another great point there that we would be chain-free (and known to be reliable as well) Better the devil you know with a buyer maybe.

I agree they would be very unlikely to sell right now with their mother still in the care home - especially as we are quiet tenants and no bother - it's a nice easy solution for them. Whether they decide to sell when she passes away (which could be a loooong time or it could be tomorrow!) is another matter but they would at least be more likely to be amenable at that point than right now. But yes, they could be completely illogical! Who knows what this house means to them? They may never want it out the family or something!

We're currently still saving our deposit so not quite in a position to move just yet, but when we have more than enough I guess there is nothing to lose by approaching them directly first before offering elsewhere.

Great advice malcolmffc - those things seem obvious now that you mention them, but may well have not occurred to us at the time.

rushandy · 26 January 2015 at 12:30PM

We nearly bought the property we were renting previously. The landlord advised us he wanted to sell it, but offered it to us at 25k over the market rate (the property next door had sold the year previously, so we had a pretty good idea what that was).

I counter offered at 5k above market rate as I was willing to pay a little more for the hassle of not having to move, but it was declined. We moved out and the landlord then listed the property at his original asking price, but has since dropped it to the market rate (5k below what we originally offered). I bet he now wishes now he hadn't been so greedy in the first place :-). It's still unsold unfortunately.

We're in the process of purchasing another house and are very happy anyway (should be completing this Friday).

penguingirl · 26 January 2015 at 12:57PM

Similar to rushandy- be prepared for them to ask for a silly asking price (obviously not guarenteed, but always a chance). I had a friend looking to buy and she contacted her LL after she saw 4 other flats up for sale in the same block. He asked for 20k more than others were being marketed for. She politely declined and bought one on the floor above.

Seeing as you're not ready to push forward with this just yet, maybe mention it to them next time you have any contact? Just a 'if you're ever thinking about selling, I'd be interested.'. You never know, they may want to sell sooner than you'd expect and if she were to die soon it might be one less stress for them to worry about selling her property.

lizards · 26 January 2015 at 10:00PM

Thanks both! Yes, I can well imagine they'd ask a silly price especially if they want to bypass agents altogether. There are some houses locally that are on the market for silly money that haven't sold, and prices are being reduced all over in the last few months too. However somebody who hasn't been watching the market as closely as I have and doesn't have the plug-ins installed to show the price history of a property or how long it has been on might naively think they're legitimate prices. I can well envision a scenario similar to the one rushandy describes!

We have told the LA we'd be interested in buying the property over a year ago now (not sure if that was totally the best idea but we have no contact with the actual landlord) He has said he'd mention it to them if they come to sell and asked if we wanted him to ask directly at the time but we were not in a position to buy then so we said no. We possibly could right now with a 5% deposit so long as it wasn't valued at silly money, but we'd rather have a 10% or more to improve our chances of acceptance.

fishpond · 26 January 2015 at 10:10PM

lizards wrote: »

Obviously it very much depends on individual circumstances and so on, but -

Is it a fairly acceptable thing for tenants to buy the property they're renting? I'm assuming, of course, that they want to and are in a position to do so and the landlord is happy to sell!

I'm thinking of both scenarios of putting in an offer even though it's not for sale, or offering to purchase if it is put on the market for whatever reason.

Do landlords in general try to avoid selling to their tenants? They'll already presumably have to pay a fee to the letting agent if they do, so no financial advantages of bypassing an estate agent. I'm aware of the other obvious downsides for the landlord e.g. house not on the open market for starters or tenants theoretically discouraging other viewers. However do many landlords overlook those issues for the sake of convenience, or maybe even the human aspect because on a personal level they'd rather see their property go to the people who have made it their home? Does that even happen??

It's all theoretical for us right now, but in an ideal world we'd love to buy the house we're in one day, and there is a chance it may eventually come up for sale anyway (rent paying care home fees situation) I'm just wondering if offering to buy the place ourselves is something we could possibly have a chance of succeeding with or if it's likely we'd be flat out refused. Not that I'd pin all our hopes on it if it was a reasonable possibility, but I'd like to know if I'm wasting my time even thinking about it!

Why would any one pay a letting agent for selling a property?
Talk to the LL, you may be pleasantly surprised, but do not expect a price much different to the open market.

buttonmoon · 26 January 2015 at 10:20PM

malcolmffc wrote: »

If I was a tenant buying then I would insist on the following:

- Rent is only payable up until the day of completion of the sale
- If exchange is delayed through action (or inaction) of the landlord such that the lease will expire before completion, then the lease to be automatically extended with no change in rent
I pointed out to the EA (who was also the LA) that they could not guarantee that my rent would be returned if I completed after the first of the month. As there was a delay at the LL end with exchanging he told us we didn't need to pay any more rent and kindly sent this to the EA (who forwarded to my solicitor).
- The deposit to be returned in full regardless of the condition of the property - got the LA (who was also the EA) to agree to this. They returned it after exchange and I used it to pay my solicitor!
- All agency fees to be covered by the landlord - there was no agency fees (I think the EA was happy with his commission)
- Landlord maintains building insurance up until exchange

- yes

LL wanted a quick sale so was in a good negotiating position.

buttonmoon · 26 January 2015 at 10:23PM

Opps my comments are stuck in the quote!

lizards · 27 January 2015 at 10:52PM

fishpond - I'm assuming it's because the letting agent "introduced" the tenant and the landlord in the same way when you hire a cleaner or a nanny or similar through an agent, if you take them on yourself even if they've quit the agency (within a specified time period) you have to pay the agency a fee. Assuming they find out of course!

Then again thinking about it further if the landlord was going to sell anyway, it makes no difference who he or she sells it to - the letting agent has made all they're going to from the deal as there is no tenancy to be involved in any more. So I guess it is different.

I'll have to check our contract and see what it says as I do vaguely recall a clause in there (or I could be misremembering!) but it could well be it might not stand up anyway.

buttonmoon - I'd hope if this house is to be sold due to the sad loss of their mother, they'd want a quick sale as well to realise their inheritance as quickly as possible - I hope so!

stator · 27 January 2015 at 11:09PM

Many letting agents try to demand an introducers fee if the renter buys the property, but I believe these have been found unlawful/unenforceable by the courts.

lizards · 28 January 2015 at 1:29PM

Good to know, thank you!!

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Buying the property you rent as a tenant

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