Renting Home to Prospective Buyer

garyk1968

Has anyone rented out their house to a tenant who ultimately wants to buy?

With my house on the market, I got approached by someone who viewed my house, expressed an interest and made a (non-proceedable) offer. Their house is on the market and has yet to sell.

So they want to rent my house until theirs is sold and then buy mine.

Of course means I need to move out (I live alone and can move in with gf), the mortgage company will let me rent for a max of 2 years, as my home doesn't have a buy to let mortgage on it so has anyone done this? pitfalls etc? I would be looking to do this as a legally binding agreement, I've searched online and only found 'option agreements' but this is more suited to developers and new builds on land.

Aside from the hassle of putting stuff in storage and moving I'm wondering if there is anything else I should be factoring in?

user1977

Factor in the risk that they might never buy and you end up with a longterm tenant (with the hassle and bureaucracy of you being a landlord, having to pay extra stamp duty on your purchase, etc).

I wouldn't entertain this if you actually want to sell the property now.

_Penny_Dreadful

garyk1968 said:

Has anyone rented out their house to a tenant who ultimately wants to buy?

With my house on the market, I got approached by someone who viewed my house, expressed an interest and made a (non-proceedable) offer. Their house is on the market and has yet to sell.

So they want to rent my house until theirs is sold and then buy mine.

Of course means I need to move out (I live alone and can move in with gf), the mortgage company will let me rent for a max of 2 years, as my home doesn't have a buy to let mortgage on it so has anyone done this? pitfalls etc? I would be looking to do this as a legally binding agreement, I've searched online and only found 'option agreements' but this is more suited to developers and new builds on land.

Aside from the hassle of putting stuff in storage and moving I'm wondering if there is anything else I should be factoring in?

Assuming this property is in England you would be giving the tenant a full blown Assured Shorthold Tenancy and you would need to comply with all necessary legislation and ensure you provide all the necessary prescriptive information or you'll have a hard time evicting should the tenant pull a switcheroo and decide not to buy.

london21

Personally would not.
Eviction is not straightforward.

Too risky 

UnderOffer

Do they have a current mortgage on property they are selling? assume not, as surely they would not be able to rent yours as well as pay for their existing house monthly costs? 

JGB1955

Avoid at all costs.  Do you really want to become an 'accidental landlord'?

tightauldgit

Unless you have something binding then there's no commitment from them to actually buy your house and I'd be worried that down the line they start playing the fool - what happens if they come back with an offer 20% less than you wanted and they refuse to play ball in moving out if you want to sell to someone else? 

Unless you really want to rent out your house it seems unnecessary to do this

user1977

tightauldgit said:

Unless you have something binding then there's no commitment from them to actually buy your house 

And I don't see how "binding" anything could be beyond something amounting to an option agreement for them to buy if/when they sell their existing property.

SavingPennies_2

All the risk is on your side. Find another buyer.

Stubod

+ another vote for "don't do it"...far too much hassle, and a lot could go wrong!!

ArbitraryRandom

user1977 said:

tightauldgit said:

Unless you have something binding then there's no commitment from them to actually buy your house 

And I don't see how "binding" anything could be beyond something amounting to an option agreement for them to buy if/when they sell their existing property.

Exchange contracts with a VERY long away completion date?