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Buying The Property I'm Renting


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#1 Faloola

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Posted 25 October 2011 - 07:22 PM

Has anyone got any thoughts on or experience of this?

We really like the place we're living in now so I thought I'd enquire whether the landlords would consider selling it. The agents rang me last week to say they would consider selling and had had it valued at £290-295K (I'm taking this as an estate agent's asking price; a similar property nearby but not as modernised was on the market at £250K and sold recently). We have just signed a 12 month tenancy so there is no urgency to buy, but at the age of 41 I don't want to spend too long renting or I'll be running out of time to pay off another mortgage...

Just wondering what I should take into account when deciding what to offer (or whether to)? If we pay £275K the repayments on a 24 year repayment mortgage (5 year fix; 30% deposit) will be much the same as our present rent, and hopefully we'll be able to make some overpayments during the fixed term. The property is only ~20 years old & has been completely refurbished (new bathrooms, kitchen, boiler, double glazing) recently so hopefully shouldn't need any large investments in the near future.

Anyway the way I see it:

PROS
(i) Won't actually have to move!
(ii) We know the property and area well.
(iii) Landlords recently bought a property (January) and are presumably interested in selling this one to pay off any mortgage they're taken out. I was a bit surprised they were willing but I guess with the outlook for house values at best flatlining they want to sell this place for as much as they can now to compensate for their recent aquisition which will also fall in value.
(iv) No chain and no potential competition.

CONS
(i) Landlords don't need to sell and may not be willing to negotiate on price.
(ii) Don't want to fall out with landlords by making them an insulting offer.
(iii) Prices falling - doesn't matter too much as would want to stay here barring disasters and have reasonable equity.

I'm tempted to make an offer of £275K now and say that if this is unacceptable I'll make another one next year (which may be higher, the same or maybe even lower depending on what happens in the market).

Is there anything I'm not thinking of here? :unsure:

#2 curious1

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Posted 25 October 2011 - 10:27 PM

Reduce your offer every year by the amount you've paid in rent... :)

Similar situation here, but could pay the mortgage off in 10years with a 10yr fix at 3.99..... very tempting to do. The house would need to loose >40% value over the 10 years for me to be worse off than renting. :o (not taking maintenance in to account)

#3 Democorruptcy

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Posted 08 November 2011 - 08:02 PM

I'm tempted to make an offer of £275K now and say that if this is unacceptable I'll make another one next year (which may be higher, the same or maybe even lower depending on what happens in the market).

Is there anything I'm not thinking of here? :unsure:


Why bother saying in advance you will make another offer next year? It gives them the option to refuse now, hoping for more next year. I'd be more tempted to say if they don't like £275k never mind and I would see how low prices have dropped next year and what's on the market then.

Don't forget to mention they save on the estate agent fees they would have to pay if they had to put it on the market.

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#4 porca misèria

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Posted 09 November 2011 - 01:51 AM

Why bother saying in advance you will make another offer next year? It gives them the option to refuse now, hoping for more next year. I'd be more tempted to say if they don't like £275k never mind and I would see how low prices have dropped next year and what's on the market then.

Don't forget to mention they save on the estate agent fees they would have to pay if they had to put it on the market.

Don't offer £275. Or any such sum.

If you want to put in an offer, get a third-party valuation from a RICS surveyor. Not an EA, who suggests a fly-a-kite asking price. Discuss it with the landlord, and get them to agree to the valuation before actually having it done.

#5 Faloola

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Posted 14 November 2011 - 10:42 PM

Not an EA, who suggests a fly-a-kite asking price.


You're not wrong there. The similar property on the market for £250K sold for £220 in September. Two others sold for £250K in 2007 and 2008. £290K my **** :rolleyes:

#6 Frank Hovis

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Posted 15 November 2011 - 07:18 AM

Why bother saying in advance you will make another offer next year? It gives them the option to refuse now, hoping for more next year. I'd be more tempted to say if they don't like £275k never mind and I would see how low prices have dropped next year and what's on the market then.

Don't forget to mention they save on the estate agent fees they would have to pay if they had to put it on the market.


This.

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#7 Faloola

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Posted 15 November 2011 - 09:37 PM

I seem to recall that our tenancy (and I think this is common these days) has a clause stating that the sellers have to pay the estate agency the usual percentage fee if the tenancy leads to a sale of the property

#8 porca misèria

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Posted 16 November 2011 - 01:49 PM

I seem to recall that our tenancy (and I think this is common these days) has a clause stating that the sellers have to pay the estate agency the usual percentage fee if the tenancy leads to a sale of the property

If you and LL are serious, I'm sure you can think of a wheeze there. Like using a shell company. Or renting direct from LL for long enough for such a clause to lapse.

Or even [gasp] just pay up and be glad you didn't have the hassle of a regular sale.

#9 Faloola

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Posted 01 December 2011 - 06:29 PM

So the RICS surveyor says £275K

Hey ho

#10 porca misèria

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Posted 02 December 2011 - 01:29 AM

So the RICS surveyor says £275K

Hey ho

Hehe. Well, you were already contemplating offering that, so I guess it's in line with expectations.

Might be worth discussing with the landlord (and your lawyer) whether you can find a wheeze to get the notional price below the £250k threshold and pass them the extra as some kind of backhander. No idea how that might work, though: I'm guessing the taxman is probably wise to things like furniture-and-fittings.

#11 Faloola

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Posted 08 December 2011 - 04:31 PM

Well I offered £265k and the landlords said they'd accept £275k

There's just no getting away from that figure :ph34r:

Agents trying to make a big deal that that's a great compromise on the asking price of £295K :rolleyes:

They know I sold my place through them at 10% below a very realistic asking price earlier this year, while landlords also bought their new place through them at £365K on an asking price of £410K :rolleyes:




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