Buying a house from existing LL

pmlindyloo

Very happy thank you.

We downsized so were fortunate enough to be cash buyers. Thought, because of this, it would be very quick but it actually took 3 months! No holdups just the way it was. We blamed their solicitors and they blamed ours!

The house isn't perfect size wise but it is in a brilliant location and we have converted the back of the garage into the dining room so much bigger downstairs.

Location is everything!

JackHill

Well I'm glad everything worked you. The reason we like this one is location is ideal for us. The only downsides are the neighbours on side are students and ther for sometimes loud and its needs some TLC. Just redecorating but nothing serious.

Jack

BobQ

JackHill wrote: »

Thanks for the responses.

G_M Would we being in it reduce the value then? They haven't given us 2 months notice and I understand that if we are awkward that it could take 4 months to get rid of us and they may want to avoid the possibility by giving us a decent price. Could this be the case?

In regards to the value I think its worth 140kish but obviously want it is as cheap as possible An opening offer of £124,995?

Thanks again

Jack

Of course if your landlord has been content to allow it to be on a rolling contract he may just plan to sell but be in no hurry to do so. He may just be giving you the option of buying it as a courtesy on the basis it will be easy for you and for him. I say this because I once gave one of my tenants this option.

I'm not suggesting you pay the asking price ( even if you want it) but if you try to get it for an unrealistic price the LL might just give you notice. So be careful not to overplay your hand.

Obviously if you get two months notice and then force LL to evict you it would be an inconvenience (that is probably covered by insurance). You on the other hand might get a poor reference and have to declare that you had been evicted as a material fact on future rental applications.

EDIT - Also how convinced are you that you will get a mortgage with only a 10% deposit. It may be possible but have you checked as it is higher risk.

JackHill

Thanks Bob. I'm under the impression the landlord wants to sell the property at some speed due to personal affairs.

So the question is if the landlord is saying the valuation is £150k what should I respond. I believe I have 3 options.

A) Ask what the best price he could give me for a quick sale and proceed from there.

Say we've looked at our finances and would like to offer £124,995.

C) Say we've looked at our finances and would like to offer £130,000-£135,000.

I believe the property is worth £140k-£143k. I would be willing to pay up to £140k and definately not willing to pay £145k+. I'm not keen on spending a penny over £140k but if all fixtures and fitting were included and my wife, friends family encouraged I would consider it up to £145k.

Thanks again all

Jack

DVardysShadow

For your situation, I would go with A] - if your Landlord is switched on, he will know that a quick sale is worth a discount to you, although you could prompt him. When you agree a price, ensure that you agree that the deposit is returned in full and communicate this to your solicitor. Although the point is 'obvious' to us here, it is best not to assume something like this in any deal.

You are most of the way there with sorting your top price - just firm it up a bit before you negotiate

JackHill

Thanks DVardysShadow. I think you're right about looking at the A option first and basically highlighting.

We are no chain first time buyers.
We will act swiftly to ensure a quick sale.
There would be no estate agents fees for you to cover.
No hassle in regards to us vacating the property and calculating returned deposit.
No lost rent between us vacating and and completion date if a non land lord buyer.
We are genuine buyers and there would be less risk of a sale falling through etc.

Although we do want the deposit returned in full and all the fixtures fitting and furniture that is currently in property.

When I ask what he's willing to sell it at how do I word it? Should I say what's your best price?

In regards to my top price I believe it's £143k. Although you are right as I'm not 100%.

Thanks again all

Jack

DVardysShadow

JackHill wrote: »

Thanks DVardysShadow. I think you're right about looking at the A option first and basically highlighting.

1. We are no chain first time buyers.
2. We will act swiftly to ensure a quick sale.
3. There would be no estate agents fees for you to cover.
4. No hassle in regards to us vacating the property and calculating returned deposit.
5. No lost rent between us vacating and and completion date if a non land lord buyer.
6. We are genuine buyers and there would be less risk of a sale falling through etc.

Although we do want the deposit returned in full and all the fixtures fitting and furniture that is currently in property.

When I ask what he's willing to sell it at how do I word it? Should I say what's your best price?

In regards to my top price I believe it's £143k. Although you are right as I'm not 100%.

Thanks again all

Jack

Your Unique points as sitting tenants in blue. These are the one which merit you a special price in this situation

I would not open a discussion with 'what is your best price?'. I would ask a more indirect question along the lines 'as sitting tenants if we bought, we would bring these advantages [in blue] to the sale, how much would you be hoping to get for the property if we were buyers'. This gives him room to name a higher price than he would actually settle for, or even just indicate a price bracket, but in such a way that you both know the score.

Mirror anything he says as best you can for your position 'we were hoping to get it in the region of £X. Obviously, we don't quite have a deal, but we are not a million miles apart, Shall we sleep o it for a day or 2?"

Try and keep the pace slow and thoughtful and give time to both sides to think. If a deal is going to be possible, exchanges should become closer in price and more clearly expressed

chunkylover

Hi Jack,

I am a landlord myself with one of my tenants wanting to buy a property as they love it (totally renovated property around 12 months ago), just to put a spin on it from a landlords point of view;

1. I would be willing to sell a property at the 'right' price, don't get me wrong I would take less than market value but certainly not 25k less than it, unless I was close to bankruptcy or in the middle of a messy divorce or similar.

2. Be on good terms with your landlord and certainly DO NOT go down the route of not paying your rent or 'we could push it 4 months option to make life hard for him', in the case of not paying I would see you in the small claims court with the aim of getting a CCJ against your name, you'd make my life hard I'd make yours a little harder, CCJ = no mortgage for a long time.

3. Go and see the bank sharpish, they'll go through all your finances and give you a decision in principle ( subject to the usual checks I.e. valuation etc)

4. Get your own independent valuations done, act as if your the owner wishing to sell and get a few estate agenst around, ask the estate agents what realistically they could get for it in today's market, and ensure they could actually sell it for that figure not just market it at an inflated amount.

4. Meet your landlord face to face and express your interest, it's easy over the phone to reject offers and fob you off, reiterate this as been your house and home for X time and you would love the opportunity to buy, tell him you have an amount of money you can borrow from the bank and then offer a realistic amount I.e. 10-15% less than your average valuation. Negotiate from there to find a mutual figure.

Just to add, again as landlords we buy properties as a long term investment (unless the property as been left as inheritance or similar), selling at well below market value for me would be a no, no, and lets face it the market as been low for a few years now, so not an ideal time to sell. However I would take slightly less than market value if they have been a good tenant and the fact I always offer less when making an offer myself, so in my case offering less would not offend me.

Some of the comments above saying the property is worth far less with a sitting tenant again would not be an issue for me, property so called worth 25k less with a tenant........... mmmmmmmm lets thinks for second, serve a section 8 as its a rolling contract and get the tenants out, yes you lose a few months rent but it doesn't come close the figures you're talking about, and after all I'm in this game to make money, not friends.


Hope the above makes some sense and good look.

JackHill

chunkylover wrote: »

Hi Jack,

I am a landlord myself with one of my tenants wanting to buy a property as they love it (totally renovated property around 12 months ago), just to put a spin on it from a landlords point of view;

1. I would be willing to sell a property at the 'right' price, don't get me wrong I would take less than market value but certainly not 25k less than it, unless I was close to bankruptcy or in the middle of a messy divorce or similar.

2. Be on good terms with your landlord and certainly DO NOT go down the route of not paying your rent or 'we could push it 4 months option to make life hard for him', in the case of not paying I would see you in the small claims court with the aim of getting a CCJ against your name, you'd make my life hard I'd make yours a little harder, CCJ = no mortgage for a long time.

3. Go and see the bank sharpish, they'll go through all your finances and give you a decision in principle ( subject to the usual checks I.e. valuation etc)

4. Get your own independent valuations done, act as if your the owner wishing to sell and get a few estate agenst around, ask the estate agents what realistically they could get for it in today's market, and ensure they could actually sell it for that figure not just market it at an inflated amount.

4. Meet your landlord face to face and express your interest, it's easy over the phone to reject offers and fob you off, reiterate this as been your house and home for X time and you would love the opportunity to buy, tell him you have an amount of money you can borrow from the bank and then offer a realistic amount I.e. 10-15% less than your average valuation. Negotiate from there to find a mutual figure.

Just to add, again as landlords we buy properties as a long term investment (unless the property as been left as inheritance or similar), selling at well below market value for me would be a no, no, and lets face it the market as been low for a few years now, so not an ideal time to sell. However I would take slightly less than market value if they have been a good tenant and the fact I always offer less when making an offer myself, so in my case offering less would not offend me.

Some of the comments above saying the property is worth far less with a sitting tenant again would not be an issue for me, property so called worth 25k less with a tenant........... mmmmmmmm lets thinks for second, serve a section 8 as its a rolling contract and get the tenants out, yes you lose a few months rent but it doesn't come close the figures you're talking about, and after all I'm in this game to make money, not friends.


Hope the above makes some sense and good look.

Thanks for you response.

In regards to 1) How much less would you being to take if you were not struggling but want the property off your portfolio as you thought it didnt have long term potential.

In regards to 2) I totally agree we have always paid rent on time and will continue to do so. We have not had much contact with them in the year or so but there have been no problems what so ever.

In regards to 3) I've already seen my bank and they have advised us to wait to see what price is accepted so we can apply to try and get a mortgage with as less deposit as possible. We have had a mortagage agree in principle but its expired as they only last 6 months with our bank but I'm confident we'd be accepted.

In regards to 4) I'm not sure I feel confident pretending to be the owner although I do accept its good advice.

In regards to 5) Again I agree but we've never met him face to face and doubt we ever will he lives abroad. I see your point that it wouldn't take £25k to get rid of us. If I'm honest if he offered us £4k cash and said leave this weekend I'd probably take it.

DVardysShaow - I agree with your advice and think its very helpful.

The feeling I'm getting is the property is worth £142k, and has been "valued" at £150k so to get a sold price of £142k. I feel we could get a 5% discount because of our position therefore getting the property at £135k. Would people agree or disagree with my thought process?

girl_withno_name

chunkylover - you seem to have read previous posts as though the OP is suggesting a final offer of £125k (17% under the 'value' of the property) whereas I took this to be their opening offer, willing to negotiate up - potentially to £143k (5% under the 'value' of the property).

Therefore your advice in points 1 and 4 seem to contradict each other as 15% below the value would give £127.5k as the starting offer - roughly the suggested level anyway, which you seem dead set against in your first point...

I'm confused!