Buying a rental house from Owner with no EA involved

[Santry]

We are currently living in a rental house with an opportunity to purchase it from our landlord. Even if we don't buy the house, it will be put on the market.

My question is how do we approach the offer ? He has told us what it is worth (approx 465,000), and has told us what he will sell it to us for (460,000). There are 2 other houses in the estate on the market for 20,000 less than what he has offered us the house for. Our house would be a little bigger than these 2 houses, but still the same concept, 4 bed semi detached.

One of these houses has been on the market for over a year, but is also a rental property so I am presuming the owner is not in a rush to sell.

Do we offer less than what these 2 houses are on the market for ? If he sells it to us we are saving Estate Agent fees, he will not have to put any work into the house to get it ready for sale. The house is in goodish condition, but a lick of paint wouldn't do it any harm.

Any advice on what offer to start the ball rolling would be very much appreciated.

Thanks.

 

[huskerdu]

If he sells to you, he saves Estate agent fees, not you and he has no loss of rental income if the house is vacated by you before the sale completes.
This saves him quite a bit of money, so you should definitely factor this into any offer and start with an offer below what other houses in the estate are going for.

You have the power that you can buy one of the other two houses. Make this clear to him. Either of the other two houses are just as good and fulfill your needs, so why should you pay more for his house.

If he is unwilling to sell immediatelt at the price you offer, you cant make him, but dont be in a hurry, you dont want to overpay.

 

[Dr2007]

Hi there,

None of can be certain about direction of market, but I think with current sentiment in the papers etc, and IIB/ IAVI all predicting at least 5% falls in prices in 2008, I would offer the following advice

Forget what the owner thinks his property is worth. The fact he wants to sell to you as sitting tenant and not take his chances with the market, makes me wonder. Did he initiate contact on sale? If he doesn't play ball let him sell see how much interest there is out in the market. I think he will know market is dead at moment?

He has priced house, above 2 other houses in area, knowing you will offer below his asking price. Don't be embarrassed to offer well below lowest price in the estate. Remember te mortgage repayments on this will take at least 20 years. Every thousand you can save now, will reduce the term of your mortgage.

Have you used Thepropertypin.com; treesdontgrowtothesky.com and other property sites to see what is going on in your area. These might give you a good idea of the pricing

Is the landlord under pressure to sell? Is he involvved in property development, buying selling stocks. Either of these and he might be under more pressure to sell than you think

If you love the house, and it is unique for your requirements, and is worth the price, and more improtantly you can afford the price, well go for it.

Offer 20% below the current market value of the property (not his valuation of his own asset!!) I would offer 25% less, as no EA fees involved, but 20% is worth a try. Don't blink. Leave offer on the table for 3 days only. If he does not agree to it by then if he returns to you reduce that offer by 1% per week.

 

[z109]

You can always pay for an EA/valuer to come and give you a valuation on the house. If you make it clear that all you want is a valuation, then the EA will still not be involved in the sale. Just because he has nobody giving advice to him, doesn't mean you should have nobody giving advice to you.