Renting & considering buying house we live in. Need advice.

A

Alli

Registered User
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Hi,

We presently rent a house, and are considering making an offer to the owner to buy it.

House not on the market, so owner may say no.

Considering putting proposal together for him, and trying to decide on a fair price to offer.

How do we decide on a fair price to offer? Do we get an agent in to value it and explain what we are doing to them?

Also, is it possible to arrange 'rent to buy' directly with owner, and where would we get information on this? I have only seen this on new developments.

Thanks,

Alli
 
Hi Alli,

I wish you were my tenant! I think from my perspective (am a landlord) I would be delighted to receive an offer on the house even if I did not intend to sell it. I would recommend you look up DAFT website as a quick reference on what house prices are going for in your area. Remember a lot of prices have not been updated to reflect current market. If your landlord is interested make an offer on the lower end of your budget to begin with (always leave room for negotiation).

If you landlord is agreeable I am sure both solicitors could arrange something in relation to rent to buy first.

You might want to let them know that you intend to buy so that if they are not intersted you willhave to move on asap. It is a difficult time for landlords at the moment with so many houses for tenants to pick and choose and negotiate rents.

Good luck anyway
 
Thanks Lynda.

It's trying to decide a price to offer is the hard part. We use an agency and never deal directly with landlord, so could speak to the agency. Because even if we approached landlord directly (neighbour has his contact details) the agency would eventually be made aware.

We are almost afraid of going too low in case we offend him, seeing as the house is not for sale...I know that sounds ridiculous! It's trying to decide what to offer is the hard part, and yet be taken seriously.

thanks for your reply!

Alli
 
Alli said:
We are almost afraid of going too low in case we offend him, seeing as the house is not for sale...I know that sounds ridiculous! It's trying to decide what to offer is the hard part, and yet be taken seriously.
Click to expand...
Business is business. Do you reckon he worried about offending you when he was setting his rent?
 
No complainer, you are right. I think we are suffering from heart ruling head.

We have paid him 55k to date in rent...thats the main motivation for buying, even though the rest of the world are holding back from buying right now.

Lease signed until next summer, so we could make an offer and if it went no-where, then so be it. Look for next house!

Similar house on for 475k in this area right now (Coolmine, Dublin 15 - close to train station). Would it be too low to offer 400? And would we go to agent with this offer; or just go to agent and say we are interested in buying and not put a figure on it?

Thanks again,

Alli
 
Let's assume the landlord wants to sell (a significant assumption on our part).

Irrespective of agent valuations or OP's perception as to a "fair price", the landlord may be in a negative equity situation and may be able to afford to sell.

So unless and until such time as his willingness and ability to sell at "market value" or thereabouts are gauged, isn't this just all hot air?
 
Sorry mathepac, I don't understand what you mean? Do you mean my post is hot air, or any offer would be hot air?

I don't get what you are saying. We are very serious, just don't know what to start offer at, and how to make the first point of contact on the offer. I have been told by a neighbour who knows landlord that the landlords situation is very comfortable, so don't think he would be in negative equity hoping to sell. but who knows.


Thanks.

Alli
 
Hi Ali,

If I were in your situation i would do the following.

Contact landlord/estate agent to advise that you recently got your mortgage approved (assuming you have, this lets the landlord/estate agent know your ready to run) and are intending to purchase a property as soon as possible rather than to continue renting. Advise you are very interested in this house and do not want to offend him but before you go elsewhere would he be interested in selling firstly and that you have an approved mortgage of 400,000. If you feel you can't approach the landlord directly, then maybe you might feel more confident contacting the agent instead.

Grab the bull by the horns and just do it - one way or another you will have an answer in an short period of time,i hope!.
keep us updated

ps - I think a mortgage of 400,000 is very very very steep on the repayments but I suppose it is Dublin and you both have hopefully thought long enough about it. Good luck
 
Thanks Lynda.

Yes, 400k is ridiculous for a 4 bed semi in my opinion, and I have never seen why Dublin houses are so expensive compared to other parts of the country...in saying that, our wages are higher here than they would be in other parts of the country so we will have to just live with that. And we are fairly lucky jobwise and have no debts, hence can afford the repayments. Wouldn't want to go much higher though.

Going to have a good think about a price to go in at...will keep you posted!! Thank you for your help.

Alli
 
At present the landlord may have no intention of selling or may have discounted selling because of the shortgage of buyers. However if he is presented with a situation where he has a ready buyer it may encourage him to give the matter serious consideration. He may want to get access to funds to purchase a cheaper house in the country but of the same or better standard and still have a nest egg left over, He could have any number of plans which were awaiting access to funds.

What you obviously require is a starting offer and your final offer. Somewhere in between the landlord may do business or of course may not have any interest at.
Best of luck
 
You are trying to set a fair market price in the absence of a market at the moment.
Some suggestions

Look at daft check out what similar houses are selling for

I found a few houses in coolmine 4 bed semi d for less than 350 I have no idea if they are comparable or not but you would. These are asking prices and most likely negotiable. Offers tend to start 20% below asking but could be anything

Try to value based on the rent being paid. A typical standard calculation would be annual rent * a factor anywhere between 14 and possibly up to 20. This would be the number of years that it would take an investor to recoup the investment through rent alone.

Only you can value how much the house is worth to yourselves but this might be a good starting point you should take in to account the possibility of property taxes in the future .
 
Some landlords just don't want to sell because they have no mortgage on their houses and are happy to get the monthly money, and they prefer having a house to having money in the bank. I have tried this twice with houses I have seen 'for let' and the answer was no for various reasons.
Do not offer any money until you know the house is for sale.
Don't go to your letting agent unless they are an estate agent also. It's not in the letting agents interest to let you go as you are great tenants. It's nothing to do with them.

I would get your solicitor to ring/write to the landlord asking them are they interested in selling.
Then worry about the offer you would make.
 
Thank you all for some very sound advice!

Definately food for thought. We are going to hold on a bit longer and check out similar houses in the area and what they go for, and also the dreaded budget, in case stamp duty / property tax issues arise. 400k over 30 years a lot of money, and we are still in a position to save a lot right now, even though renting.

Thanks again for some great advice.

Alli
 

I wouldn't talk figures with the landlord at all yet, I'd just say mortgage approved and interesting in buying the house. The landlord either wants to sell the house or not - find this out first before doing anything. If he doesn't wish to sell, then you start looking elsewhere. If he does want to sell, then don't suggest a price - get him to do that. A seller should always have an asking price imo - at least then you have something to work with.
 
Does it not put you in an awkward position to do this? The landlord seems to have the upper hand because you are afraid of upsetting him. I personally would not want to be letting worries like that affect the amount I am willing to offer. If its just some random house seller you offend, no worries, move on, but in this situation you are kind of tying one hand behind your back.

It could be that you just happen to be in the right place at the right time, but I think its unlikely, and I would probably go looking elsewhere before there. Don't let the 55k you have paid in rent cloud your judgment. You would have paid that either to a bank to rent money for a house or to a landlord to rent a house. I do not know why you mentioned that, as it is highly unlikely the landlord will see that as some kind of "down payment" in a rent-to-buy scheme that does not exist.
 
Update to all who assisted with this post:

Our landlord does not wish to sell this house. He bought it many years ago and is now retired and the rent is an income for him.

So we have moved on in our search for a house! Bit disappointed initially but now we can eliminate here, its onwards and upwards!

Thanks again everyone.

Alli.
 
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