Tenant expressed interest in buying rented house, how best to proceed?

david171

Hi all,

We told our tenant last week that we would be unable to renew there lease, (expires in 3 months), as we plan to sell the property at the end of the tenancy.

After telling them this, they have expressed an interest in buying the property and have asked what price we plan to sell at?

We have had 3 valuations done, all coming back roughly at 150K - excluding any white goods and furnishings.

All correspondences so far with the tenant have been via email and I am a terrible negotiator and I dont know what to email back!

I want to make it clear that obviously we would consider offers under this valuation if selling to the tenant as we know the hassle they would save, but we dont want to sell our selves short. Properties on the street do sell quite quickly, usually in less than 2 weeks.

Plus we have already said to the tenant that all the furniture (Dishwasher, washing machine, fridge freezer, sofa, 2 double beds, 2 double wardrobes etc would be included in any sale made with them). How could I end the email to leave it open to assess how they feel about the valuation

bigfreddiel

Agree a price and get the solicitors to start the proceedings.

Remember to cslculate your cgt so you're ready for it

Cheers fj

kinger101

For the property, I'd be inclined to go with the average of the three valuations, and offer the tenant that price. The furniture is worth what you can get for it on E-bay, or the expense of taking to the skip. Give an "all-in" figure of say £1,000. It's best if you price this separate to the house for SDLT (tenant) and CGT (yourself) purposes. Unless they are really stretched on deposit etc.

See what the tenant comes back with, but;

(a) if the tenant buys, you won't have EA fees;
(b) if you want to sell to someone else, you may have to evict the tenants first if it's a residential buyer. This could take months.
(c) not having to sell furnishings/empty the property is a bonus too.

So I'd give them a bit of wiggle room on negotiating down.

El_Torro

If the property is worth £150k then what would be your asking price? Bearing in mind that depending on where the property is respective buyers may wish to offer less than the asking price.

I would just tell them what the asking price is and let them take it from there. If you're willing to accept a lower figure for the convenience of selling to the current tenants that's fine. Don't tell them that though, let them make a counter offer. If the counter offer is sensible then you'll both feel like you're getting a good deal.

jonesMUFCforever

Have you instructed an estate agent yet?
If not then the sale to the tenant might well save you 2% plus VAT on the selling price.

Gives both sides a little wiggle room - you say sell at £150k they offer say £147k then you are no worse off for accepting the lower amount.

theartfullodger

Check the agreement you have with any letting agent: There just might be a clause meaning they are entitled to a % on sale to tenant or someone otherwise introduced by them. Might end up in court disputing it but check....

elverson

Might also be worth checking with the tenants that they have the deposit and finances in order for a mortgage (presuming that they will need one).

Dird

theartfullodger wrote: »

Check the agreement you have with any letting agent: There just might be a clause meaning they are entitled to a % on sale to tenant or someone otherwise introduced by them. Might end up in court disputing it but check....

They can just say they're selling through a different EA & the tenant has found a new place to live

agrinnall

Dird wrote: »

They can just say they're selling through a different EA & the tenant has found a new place to live

Yes, I'm sure the court would regard that as a valid excuse for breaking a contract...

G_M

* as artful says, do you use a letting agent? If so, read the contract. Many letting agreements include a clause that in the even of the tenant buying, the agency gets a sale introduction fee.

* don't think you can keep quiet and avoid this. Estate and leting agents keep their eyes on sales and name of buyer via Land regisyry - it's their business. It's their income!

* agree a price based on the average valuation. But bear in mind many estate agents over-value, hoping to convince you to use their services

* work out a realistic figure for value of contents (check ebay prices), but agreement in this can follow later via solicitors (fixtures & fittings list)

* check the tenants can afford the price you agree - mortgage in principle? cash in the bank? You don't want to waste your time