Buying a house from existing LL

DVardysShadow

JackHill wrote: »

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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?

Your unique advantages already covered are

1. There would be no estate agents fees for LL to cover.
2. No hassle in regards to us vacating the property and calculating returned deposit.
3. No lost rent between us vacating and and completion date if a non land lord buyer.

1 is worth £2,000, 2 is possibly worth £1000 [although you have set your own price to be bought out as £4000] 3 is worth 3 months rent. I make it £5000 value

Without challenging your open market valuation of 142000, I would say that £7000 is a good opening ask for your unique value, £5000 is the actual difference in value which means it is really no odds to him between selling to you or on the open market and £4000 is where it becomes to his advantage to sell to you. You need to cut him some of the advantage.

If your open market valuation of 142 is valid, then I would expect to see a deal could be struckl between 135 and 140

JackHill

Thanks DVardysShadow - Again I think you're spot on with your maths. I think the discount is £5k but we need to cut the LL in making it a discount of £4k.

Obviously I'm not a skilled estate agent so I don't know the market value is £142k, although I think its a strong guess. I agree that we'll probably end up buying in the £135kish mark, I'd just like it to be £125K. I'm just greedy that's all. Another factor is how quickly the landlord need to sell the 3 months of lost rent £1875 becomes £2k++ with the value of time added.

Just to ask an open question if its "valued" at £150k, market value £142k, we want to pay £135k what should our opening offer be £124995 or £130,000?

Thanks

Jack

pmlindyloo

To be honest I wouldn't worry too much. You just need to open negotiations so start with the lower figure and wait for a reaction. You've got to start somewhere and since you live there you can happily carry on negotiating for some time.

The only thing I would concern myself about is the fact that your LL lives abroad.

How has he come to this valuation? Have you had estate agents around to value it ?(instigated by the LL)

Our LL seemed to base his figure on what he had paid for it and of course he had no idea about the market.

Please do your homework.

Any similar proerties up for sale that you could visit and gauge the price from them? (Remember these are only asking prices.) Have you checked the price sold of similar properties? Being 'armed' with relevant information is always useful.

DVardysShadow

JackHill wrote: »

Just to ask an open question if its "valued" at £150k, market value £142k, we want to pay £135k what should our opening offer be £124995 or £130,000?

£124995 or £124998.49 if you let us have the hanging basket.

Seriously, you are honing this too finely. It is not a normal EA sale with a defied asking price, you are trying to open a negotiation.

Ask the LL for his range as I suggested initially and mirror the format of his answer. I expect he will be vague to start with, don't be much more precise unless you can see he is ready for you to pitch a price in. So if he says 'in the low £140's', don't pitch in with '£132450 take it or leave it'. Pitch in with 'we were thinking low £130's, do you think there is a middle ground?' try and leave a question or an opening.

JackHill

pmlindyloo wrote: »

To be honest I wouldn't worry too much. You just need to open negotiations so start with the lower figure and wait for a reaction. You've got to start somewhere and since you live there you can happily carry on negotiating for some time.

The only thing I would concern myself about is the fact that your LL lives abroad.

How has he come to this valuation? Have you had estate agents around to value it ?(instigated by the LL)

Our LL seemed to base his figure on what he had paid for it and of course he had no idea about the market.

Please do your homework.

Any similar proerties up for sale that you could visit and gauge the price from them? (Remember these are only asking prices.) Have you checked the price sold of similar properties? Being 'armed' with relevant information is always useful.

Hello, Thanks again!

The landlord has a letting agent who we deal with and arrange the valuation here, so no worries. We've looked at similar properties and there on the market for £160k albeit a better finish in the properties. These properties are probably selling for £150k+. Properties around the area have sold for £130k-£165k.

I've tried to do homework and checked Zoopla etc, viewed properties around and of course asked advice from you lovely people.

Thanks

Jack

JackHill

DVardysShadow wrote: »

£124995 or £124998.49 if you let us have the hanging basket.

Seriously, you are honing this too finely. It is not a normal EA sale with a defied asking price, you are trying to open a negotiation.

Ask the LL for his range as I suggested initially and mirror the format of his answer. I expect he will be vague to start with, don't be much more precise unless you can see he is ready for you to pitch a price in. So if he says 'in the low £140's', don't pitch in with '£132450 take it or leave it'. Pitch in with 'we were thinking low £130's, do you think there is a middle ground?' try and leave a question or an opening.

I agree your right. I'll start with open questions and mirror his format. Thanks again.

Jack

Yorkie1

Just one thing about fixtures and fittings. If I have read your earlier posts correctly, OP, you are thinking in terms of about £5K for the contents of the house?

This is likely to be way overpriced. You need to price them at the amount they'd fetch on ebay as second hand goods. For a house worth under £150K, I can't see the contents being worth anywhere near what you're envisaging.

The reason this is important because of stamp duty - putting too low a price on the house, and too high an amount on the contents, can be seen by HMRC as attempted evasion of the proper amount of tax (although as you're not buying at a stamp duty threshold, the chances may be lower of it being formally investigated).

JackHill

Yorkie1 wrote: »

Just one thing about fixtures and fittings. If I have read your earlier posts correctly, OP, you are thinking in terms of about £5K for the contents of the house?

This is likely to be way overpriced. You need to price them at the amount they'd fetch on ebay as second hand goods. For a house worth under £150K, I can't see the contents being worth anywhere near what you're envisaging.

The reason this is important because of stamp duty - putting too low a price on the house, and too high an amount on the contents, can be seen by HMRC as attempted evasion of the proper amount of tax (although as you're not buying at a stamp duty threshold, the chances may be lower of it being formally investigated).

Thanks, I agree. Probably worth up to around £2000 so we'd offer that for them if need be.

Emailed LL and just waiting for a response.

Jack

JackHill

Hello,

Just to provide an update and ask some further questions. The landlord wanted £150k non-negiotable and we declined. He is putting the house up for £160k obviously in an attempt to achieve the price.

He hasn't served a s21 and is seems ok for us to be living there. He has always been polite and also said there wouldn't be a for sale sign outiside the property. Anyway I got home today and there was a for sale sign outside the house. I was a bit cheesed off tbh. If he asked I would have said it was o.k but I'm still a bit annoyed. What do you think I should do?

J

BitterAndTwisted

Do nothing. He's entitled to put the "For Sale" sign up as the house is for sale. Objecting or commenting will only sour relations