Buying Home Directly from an Owner

My wife and I are trying to buy a family home - having recently sold our own home to relocate to be closer to support aging mum.

Viewed several houses in area in Dublin we'd like to live but been outbid. We are a cash buyer with proceeds from our sale, savings and a small family loan in place. Some agents tell me I'm no different to a mortgage approved FTB who they consider to be "cash buyer" too

Looking at houses in good condition & ones that need work - one house we like is on market in Dublin, over 2 months, executor sale, made an offer that wasn't accepted or rejected, owners want more - they're looking for pretty much the same price (or just 20k less) as similar houses in the area that we Viewed but are turn key (good windows, doors) - so we have withdrawn offer. That agent said they'd like our cash offer but unfortunately the owners holding out for the probate value -

we decided to ask around friends, neighbours if anyone is considering selling - and one friend has found us a person in their estate who has decided she wants to sell to permanently move to her holiday home. I wrote her a letter to explain how we are a family looking to buy in her area, heard she was considering selling and asked if she'd consider letting us view and make her an offer - and deal via our solicitors. Hand delivered the letter and to my delight, she phoned me within hours to thank me for my lovely letter and we are visiting her in a few days

I'd love to hear from anyone who might have taken this approach, what advice they might have. I only wish we could have sold our old home directly and saved several 1000s on estate agent fees!

She has owned the home since it was built in the late 70s, her sibling who lives abroad has an equal share in the house too as they originally helped her and her husband to buy the house so she advised that sibling will be involved in the agreement of the price

There is another home for sale in her estate, we Viewed this too, ex rental property in very poor condition, only us and 1 other party attended its 1st open viewing- the agent even admitted the price is "mad" but was set by the vendor and that the market will decide ...but no offers on it to date

Jerseygirl64 said:

I'd love to hear from anyone who might have taken this approach, what advice they might have.

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What exactly are you looking for advice on? You agree a price (that'll be the hard bit), then you have to get a solicitor and the seller gets their own solicitor.

I haven't done exactly the same thing, but I have negotiated directly with a seller (no other bidder) on a property that was handled via an estate agent.

You need to work out quickly if the seller will be able to make a decision, or if your offer just becomes a prompt to put the house on the market to try get more.

If the question is "can I sell/buy a house without an estate agent" then the answer is "yes".
Both parties will still need a solicitor to handle the legal and conveyancing work.
The buyer will most likely still want to engage somebody to do a structural survey.

Good for you taking the reins like that. No advice other than make sure the i's are dotted & t's crossed on both sides by the solicitors.

Hi Jersey

Years ago, I bought a (commercial) property directly from a seller and it was a very satisfactory process. He wanted to sell and I wanted to buy. There was no complication of an auctioneer getting in the way. He saved the auctioneers' fees. I was a serious buyers and he knew that. If I wanted to see the property again before the actual closing, I called him directly. He had a bit of a problem with moving on the closing date, but we closed anyway and he rented it for a few weeks. I have a vague memory that I bought some contents from him. But overall, dealing direct was great. He was a smart guy so the price I paid was fair. I wasn't trying to get and didn't get it at less than the market value.

I would recommend that you try to reach a fair price and not try to exploit them.

So I would say something like "If this were through an auctioneer, he would ask for more than it's worth, and I would go in with a low offer expecting it to be rejected and then bid up bit by bit over the next few days or weeks. But if you have an idea of what you want and if it's reasonable we won't mess around. If you have a reasonable price in mind, we will skip the dancing around and make you a reasonable offer close to what you want so we can agree a price quickly or maybe realise that your expectations are out of line with what we want to pay and then we can move on and we won't be wasting anyone's time."

Brendan

Jerseygirl64 said:

I'd love to hear from anyone who might have taken this approach, what advice they might have. I only wish we could have sold our old home directly and saved several 1000s on estate agent fees!

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The function of an estate agent is either to sell a property for more, or quicker, than the vendor would manage if marketing it on their own behalf. Any estate agent who fails in either respect isn't worth their fees.

It's the vendor's business to look after their own interests. If I were asked to advise the vendor here, I would counsel them not to sell without an estate agent but that's not your concern here.

Thanks Redonion for your reply. We have a solicitor in place who is holding our funds for us as we're hopeful to try buy soon

She said she hasn't approached any agents and willing to sell in January, asked me if that's OK, which of course it is.

I guess my question is how to figure out the fair value to offer her - she won't have an agents selling fee to pay or marketing fees (those alone cost is 1,000s)

My friend says her house is in original 3 bed semi condition, likely a poor BER and will likely need modernisation - we don't mind that, in fact we'd prefer a house in original but good, looked after condition - that we could upgrade over our lifetime - but mindful of high construction costs

Jerseygirl64 said:

I guess my question is how to figure out the fair value to offer her - she won't have an agents selling fee to pay or marketing fees (those alone cost is 1,000s)

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Take a look at the Property Price Register for similar homes that have sold recently, given the house is in an estate you've a better chance of finding similar ones sold recently.

Thanks @TMcGibney for your reply - I want to offer the lady a fair price & will need to decide what that is after we view hers. I've printed out a few houses on her estate from property price register but they had alot of money spent on upgrades, extensions, attic conversions, insulation - so not directly comparable

The offer we made on the executor house was 40k below asking price and I'm glad they didn't bite our hand off now because now having seen other houses, I've realised what we offered was too generous - an D2 Ber and in need of modernisation - we were its 1st offer after weeks on the market - while other houses we Viewed have since sale agreed quickly - had we been able to stretch an extra 25k on one of those, we'd have a potential home with no renovation to do ... which made us realise my offer on the doer upper was simply too generous (in a stressful personal situation and trying to rehome us ASAP... made that bid emotionally instead of sensibly)

All you have is a verbal agreement to sell you the house in a few months, Sounds a bit flaky to me. At least if someone has engaged an estate agent they probably commited to selling.
The risk here is that the seller is not serious. She has said that her sister will be involved in the selling. Her sister could think they will get a better price by advertising the house publically for sale and get more than one potential buyers.

I hope it works out for you, but if I were you , I'd make sure its not the only option you have.

Thanks Brendan for that - absolutely in no way would I want to exploit anyone - just trying to decide a fair price in what is a very overpriced market right now - some friends advising they'd hold off as the extra heat covid added to the market might come down as interest rates for borrowers now much higher than last year - we will be living in the house for life, its not an investment that we will be flipping in a few years - but I also don't want to overpay and leave us without any money to replace anything needed- older house with a low BER

Our solicitor is seeing house sales fall at the last hurdle as banks tighten their purses more with sellers having agents needing to approach underbidder - I guess what I'm saying is that I'm trying if I can to avoid the crazy bidding wars - competing with a mortgaged buyer who Jack's up the price by 30 or 40k and in a few months time runs onto difficulty with their drawdown (this in fact happened our 1st buyer and our sale collapsed, setting us back nearly 5 months) - we subsequently sold to a buyer who had a very low LTV and the process ran really smoothly thank goodness- we were offered 7k more by another bidder but opted for the lower risk of the other buyer

I sold my last house privately, and at the same time bought privately also, just the way it worked out! When selling I had an estate agent already give me a value for it (6 months previous so wasn't trying to cut the EA out, just hadn't decided at time to sell), so we knew the value, we went with that value, told the person who wanted it & they were fine with that & agreed. From there solicitors take over & that was it. We weren't after more, it was valued at this much, thats what we wanted.
When buying the other house, we knew a rough price as it was in an estate, the seller asked us to give a figure so we gave one, a little low, and she told us as much, so we both came to an agreement after that - again she had it valued & the estate agent told her she could get more, but thankfully for us, she was happy with a certain figure & didn't want the hassle of the EA etc. Again, then solicitors take over then. Both sale & purchase went smoothly after agreeing...the usual bits here & there but nothing major.

Jerseygirl64 said:

while other houses we Viewed have since sale agreed quickly - had we been able to stretch an extra 25k on one of those, we'd have a potential home with no renovation to do ... which made us realise my offer on the doer upper was simply too generous

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Just be aware that fixer-uppers are rarely sold at a discount that reflects the true cost of all works that might be required to complete renovations to your taste. Indeed you will often see houses that need a lot of work selling for similar prices to neighbouring ones in good repair. If you end up low-balling the offer, you may offend the owner who might then refuse to engage with you.

@myate - congratulations and your story gives me hope

Thanks @huskerdu - it's at an early stage, only delivered letter yesterday and she phoned me a few hours later -

Of course she might engage an agent to sell, I get that- and if we end up buying through them, she will have to pay them 1.5% in agents fees - what I'm trying to negotiate is a fair market price, she saves on agents fees, we have funds in place, our solicitors look after conveyancing - she gets her money quicker

What we did ourselves was get 3 agents out, we took the average of their 3 valuations and we ended up selling for less than those 3 valuations - possibly had we held on longer, we could have achieved more but it was a rural house and commuting long distances alongside caring responsibilities meant I chose a solid offer that has low risk of falling through.. time was like money in our case

Yes am continuing to stalk Daft and myhome.ie and have all alerts set up - going to viewings and guess thats helping us decipher what is market value right now too - noticing they are a bit quieter the viewings ... maybe time of year although money more expensive to borrow this year Vs last year so maybe having an impact

Jerseygirl64 said:

She said she hasn't approached any agents and willing to sell in January, asked me if that's OK, which of course it is.

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If you are interested in the house, then you should agree a price.

You should then exchange contracts as soon as possible with a closing date in January.

Do not leave it until January to exchange contracts as it's quite possible that she will change her mind and you will be back to square one.

Brendan

Leo said:

Just be aware that fixer-uppers are rarely sold at a discount that reflects the true cost of all works that might be required to complete renovations to your taste. Indeed you will often see houses that need a lot of work selling for similar prices to neighbouring ones in good repair. If you end up low-balling the offer, you may offend the owner who might then refuse to engage with you.

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Thanks - definitely seeing this alright and mindful of it. My friend who found this lead for me offered his opinion of what he'd offer, which is about 90k less than what I'd consider fair ... I don't want to low ball her but not over pay too... ideally I'd like her to come up with a figure she'd like

What about the ownership? How sure are you that the joint owner will agree to sell? It might go smoothly but it might not if others are involved, particularly if overseas and it is not their PPR.

misemoi said:

What about the ownership? How sure are you that the joint owner will agree to sell? It might go smoothly but it might not if others are involved, particularly if overseas and it is not their PPR.

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It's at very early stage. I will need to ask her more about this and her sisters opinion - I posted this to get people's views and opinions on it and to help prompt me to think of questions I need to ask her and our solicitor - the replies I've got, including yours, are all very much appreciated and helps me think this out more

Yes. It's the ladies ppr but not her sisters as her sister lives abroad so will have tax to pay but that will all rest with them - what we will try to establish early is her commitment to selling & I'll flag with our solicitor about the sibling living abroad

The lady wants to permanently relocate to her country home and to renovate it, that is what is motivating her to sell - I can only hope that if we like it, we will offer her a fair market price that cuts estate agent fees off for her, which in turn reduces the price for us too

Jerseygirl64 said:

a fair market price that cuts estate agent fees off for her, which in turn reduces the price for us too

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I wouldn't be using the fact she's not paying an estate agent as a way to reduce the price to you. If you're expecting her to accept 10k less, then she might as well roll the dice and put the house on the market.

Use it as a benefit to her. Along with the other benefits: she wont have to declutter the house for viewing, or spend money painting & fixing up little niggles, getting the garden tidies, or have strangers traipsing through her house every weekend until the house is sold.

As well as making sure she's serious about selling and willing to negotiate, you need to tell her what you're bringing something to the table.

For example, when I was a cash buyer, I put a 'take it or leave it' offer on the table. But I also gave an assurance that when I had an engineer look at the house, I wouldn't come back to negotiate based on things that needed to be repaired. I was buying the house 'as is', unless there was a major structural issue like subsidence, in which case I would be walking away. We agreed on the price the next working day. I grew up surrounded by trades people, and I had renovated property before so I was comfortable making that decision. Of course, I could have still backed out legally, but as part of the negotiation both parties trusted each other. They knew there were some issues that would have to be resolved for someone getting a mortgage, but I didn't.

If the seller is using the sales funds to renovate her new home, will she be able to live there during renovations? Or will she need to rent somewhere nearby? Could offering her a caretaker tenancy in the house after she sells sweeten the deal so she can get herself set up in her new place with ease? Also depends on how long you can continue the current commuting arrangement.