Selling to Tenant in situ

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Luternau

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Assuming a tenant was interested in buying, how would it work work in practice?

On the surface, it looks like it should be win win but are there likely to be obstacles to a smooth sale?

Has anyone here successfully sold or bought this way?

How best to agree market price? Seller wants a high price and the buyer a discount to market which can have tax implications.

Would seller need an auctioneer to at full fee if they are not marketing the property?
 
Luternau said:
tenant was interested in buying, how would it work work in practice
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Pretty much the same as any other house purchase.

Tenant offers price, owner either agrees or asks for more, final price agreed after the usual horse trading.

Tenant applies for mortage, solicitors do their thing, house is sold.

Of course there's possible obstacles; might not agree on price for starters or tenant might not get mortgage, or legal search might find a planning issue etc., etc.,

Any tax due on the sale is up to the vendor to sort out.

No idea why you want to involve an auctioneer.
 
I'd just note that in the Celtic Tiger era where developers were landing on landowners' doors waving fat chequebooks it was commonplace for such vendors to involve auctioneers in the process, sometimes at significant expense. I don't know why this was the case, I saw even the most hard bitten and stingy of farmers doing this. I can only assume they saw value in having the auctioneer onside to assist in the negotiation process.
 
T McGibney said:
I'd just note that in the Celtic Tiger era where developers were landing on landowners' doors waving fat chequebooks it was commonplace for such vendors to involve auctioneers in the process, sometimes at significant expense. I don't know why this was the case, I saw even the most hard bitten and stingy of farmers doing this. I can only assume they saw value in having the auctioneer onside to assist in the negotiation process.
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The farmers of Ireland are not exactly noted for unnecessary spending on professional fees!
Even the ones that are only a wee bit hard bitten and stingy.
 
DannyBoyD said:
Pretty much the same as any other house purchase.

Tenant offers price, owner either agrees or asks for more, final price agreed after the usual horse trading.

Tenant applies for mortage, solicitors do their thing, house is sold.

Of course there's possible obstacles; might not agree on price for starters or tenant might not get mortgage, or legal search might find a planning issue etc., etc.,

Any tax due on the sale is up to the vendor to sort out.

No idea why you want to involve an auctioneer.
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It's a hypothetical situation. I was asking about auctioneer involvement only. I would see no need for a full service agreement if they are not marketing the property.

Assume the tenant has mortgage approval in principle up to a sum that that would buy the property on the open market. For a sale to proceed, both sides have to settle on a price.

This is perhaps where an auctioneer will come in. Both parties require some guidance, and the bank would require a valuation before approving any mortgage.

In an open market sale a buyer may be quite happy to offer more than asking price, but I doubt they would be if they were the sitting tenant. It's more likely they will want a discount on the market price.
I would say it would be the same for a sale to council or housing body.
 
Luternau said:
Has anyone here successfully sold or bought this way?
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You can find AAM threads on this if you look. From memory one by a tenant and one by a landlord.

If I was a landlord I would give something like a 3% discount to fair value if selling to a sitting tenant.

You are making savings:
  1. No void period
  2. No need to tidy or repaint for sale
  3. No estate agent or marketing fees
  4. Tenant may even purchase your furniture.
OTOH there is no upside from going to market and getting a bidding war going.
 
Luternau said:
On the surface, it looks like it should be win win but are there likely to be obstacles to a smooth sale?
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The cynic in me says that any win win will favour the tenant. The government has yet to announce any scheme that favours landlords.
 
valery said:
The cynic in me says that any win win will favour the tenant. The government has yet to announce any scheme that favours landlords.
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Any scheme should be neutral but it remains to be seen. There are significant benefits to a tenant buying where they live as well as for the owner selling. A small discount on valuation should be enough. If the owner is not happy with final offer, they would not have to sell.
 
The point being missed somewhat is that if tenant was in a position to buy in the first place; they'd hardly still be renting & waiting for the owner to sell.
 
A tenant may be looking to buy and an owner may not know it.
There was a proposal to amend the assisted purchase scheme to cover second hand properties. This could enable some tenants to buy their current home where previously they could not have afforded to buy it.

I would agree that many tenants cannot afford to buy any property. You would like to see that changing. Many dream of ownership, and I would hope for some that their dream comes true.
 
If a tenant wishes to buy, he would be better waiting to see the results of the next election. Sinn Fein proposal to force landlords to sell with the tenant in situ would have to have a good discount built into the asking price.
 
valery said:
If a tenant wishes to buy, he would be better waiting to see the results of the next election. Sinn Fein proposal to force landlords to sell with the tenant in situ would have to have a good discount built into the asking price.
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My understanding is the state cannot force a sale of property to a tenant at any price and especially at a discount. A proposal was giving a tenant first refusal, assuming the price is at or near market rate. Forced sale at substantial discount is typical sinn féin talk.
 
Luternau said:
My understanding is the state cannot force a sale of property to a tenant at any price and especially at a discount. A proposal was giving a tenant first refusal, assuming the price is at or near market rate. Forced sale at substantial discount is typical sinn féin talk.
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Can't see how giving tenant first refusal is going to work in practice. Unless landlord needs a quick sale why would he accept a lower fig than the market would get him.

That's the whole concept of a market. What if someone wishes to buy the house because they are from the area and want to return there and would be willing to pay a premium to do so.
 
valery said:
If a tenant wishes to buy, he would be better waiting to see the results of the next election. Sinn Fein proposal to force landlords to sell with the tenant in situ would have to have a good discount built into the asking price.
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I think you'll find the Supreme Court would baulk at that.
 
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