Do I sell house to tenants

[Movingon2024]

Asking here as no-one else to ask for advice really.

moved abroad 2024. Uk house rented to some lovely tenants. Is in a v desirable area and a v nice property.

trnants approached after Xmas and asked to buy the house. Tenancy ends November.
they made an offer of 420, I am out of touch w uk housing market so asked for EA valuations. Came back at 500-550.

called both EAs and asked for reasons for valuations. They both said local market has increased significantly in last year linked to changed schools admission criteria (local schools are outstanding). Both said 500 would be low offer for the property.

informed tenants who then increased offer to 485. Estate agent fees (I asked) are around 1 per cent.

am very torn. Have accepted that the house needs to be sold, it’s too big for me now that kids have moved on. The tenants are a lovely family and would be great owners of it.

But the price difference if it sold at 550 would make a massive difference to our lives - I could give the kids some cash to help them with a house deposit of their own for example.

Any advice? Said I would get back to them by end weekend. thankyou so much.

Thats a really, really tricky one. Are they the type of tenants who have maintained the property well, been there a long time and reliable with rent? It is a big drop to you financially but overall would selling to them in situ also save a lot of time/work/uncertainty for you? It used to be that a sale to a sitting tenant usually came with a bit of a discount because it was an easier transaction, but I know there's no set rules about this. Its difficult, but ultimately your decision.

I would sell it to them. No estate agent fees, no hassle about viewings. And you know them.

What have other similar houses sold for recently? Why would you walk away from £60k-odd? (after fees)?
If you were a millionaire, then maybe take their offer but
rental is a business, put your business head on and think about your children's futures.

Sell! Think about the tax, maintenance costs etc you will save (and mortgage if you have one).

Selling a house to tenants makes life incredibly easier (assuming that you want to sell at some point). Getting tenants out can be a nightmare, especially at the moment when there are so few rentals for tenants to move to, as so many landlords are selling up, due to the new rules coming in. The advice to tenants now is to ignore section 21 notices and stay until the bailiffs come. And that's taking six months at the moment.

Having said that, their offer is a piss-take. I'd want at least £500k

They’ve been in 18 months.
i know I need to sell. It’s just a question of whether I go to the open market or not.
estate agents will manage everything if I went through them.
it’s just the price difference between open market and selling to tenants that’s concerning me. An wondered if I am missing anything re the process that would make one way easier than the other - I haven’t sold a house before.

You may need to pay estate agency fees if the tenants were introduced by an agency that handles rentals & sales.

I would put the house on the market and offer them first choice.I did this once before and ultimately my tenants found somewhere else to buy and I got my asking price. I also did it for my children and their futures.

No you go to market. It’s a big difference.

IME all estate agents massively inflate the price they can get in order to get your business in the first place. So an offer of 485 on a house with an asking price in the 500 to 550 range sounds ok to me.

But may be you do not want or need to sell. Or maybe you want to return to your house at some point.

If you are abroad you may not realise how much the private letting market has changed of late. The hassle (maybe mitigated if you have good tenants) combined with the changes in taxation is such that it really makes no economic sense. You can make more money with the capital invested.

It's not selling that's your problem. It's getting the tenants out that will be your problem, if you want to sell on the open market.
I'd keep pushing for more. They clearly want the house. And in the meantime read up on serving notice to tenants under the new rules coming in.

Estate agents often price properties high (to lure sellers in) then end up reducing the price. Do some research. How realistic is 550? If 500 is the realistic figure 485 is fine. Saves you endless hassle selling a house you’re not in, endless heartbreak with people pulling out, plus fees. If 550 is realistic then 485 is a big discount. I might do it anyway for the peace of mind. A bird in the hand…

I actually think this sounds like a good solution- they have the option to buy. Having read your update about they've been there 18 months slightly changes it for me. If it had been years and years I think I'd see it differently. There are other valid points posted about getting tenants out. All needs to be considered.

That’s the thing. Worried that ea values are inflated.
but I spoke to both, and they both seemed absolutely confident it would sell because of demand in our area atm. recommended marketing it in spring.
bit I read such nightmare stories about housing market in uk. Chains etc, sales taking many many months or Chan being broken. I have a mortgage of 1500 a month and would strugge to pay it without a tenant in there.

Sell to the tenants. You'll have to evict the tenants before you can sell and will have no rent coming in while it's empty, it could take up to a year for the same to go though so that's another potential £12k (?) you would lose by doing this, plus estate agents fees of £5.5k and there is a good chance you wouldn't get £550k or anywhere near. The market is really flat right now and browse the property pages to see how many people are being disappointed by recommended listing prices attracting no interest. If you can research similar sold prices in your area that gives you a better idea of what you can achieve for the house but I really believe in this case a smooth easy bird in the hand is worth more than two in the bush that might only be one anyway.

£65k is too much to just throw away. Tell them your price and if they don't want to pay it then put it on the market. They've only been there less than 2 years, it's not like you owe them anything.

I'd think if it you can either give them a £50k gift, or give it to your children.

I would go back to the tenants and ask if they can increase their offer to £500,000 which is still on the low side. Is the property in good repair? You don’t want them knocking you once the conveyancing procedure starts.

That £50k is a totally hypothetical £50k that probably doesn't exist. How many sellers are actually achieving asking price these days? Very few.

Yes it’s in good repair. I had a full survey )more than homebuyers) when I bought it 7 years ago and was fine, have done lots of improvements since.

I was extremely lucky and got a good offer on my late mum's rental property within days. But it still took six months from the tenants leaving, to the sale completing. So no rent coming in, costs for unoccupied property insurance, council tax, water rates, energy bills (insurers insisted on a level of heating, and it was winter) and arranging someone visiting the property weekly (another insurance demand).
Also the tenants left it in a mess that cost me a couple of thousand to put right before I could market.
And of course all the admin and time this involved from two hours away. If you're abroad it would be even worse

I'd have loved to sell to the tenants. But you do need to push for a sensible price and £500k would be my minimum.

I would ask if they would meet the 500k and explain it would go on the market for 550k.

If they get close to that I would sell anyway. We bought our house off the landlord and it was incredibly hassle free for both parties. He was delighted when we said we would buy as he avoided advertising, fees etc. Never mind the hassle of potentially trying to get us to leave or viewings etc.

Have you looked on right move or similar to see what properties in that area are selling for- how does it compare
also look at recent sold prices and see if it affects your decision
there’s no point being on the market at 550,000 for months on end - also I don’t think tenants have to allow viewings while they live there
years ago I viewed a property with tenants in situ and it was like a Monty python sketch

Do more research: if you haven’t already done so, check rightmove for listings, see what comparables you can find. Bearing mind that sales listings are not necessarily the price that was actually achieved.
Your agents are saying 500-550- and IME their valuations are often ambitious. Their fees of 1% plus VAT would make a saving of 6k if you sold directly to the tenants, and for that reason I’d probably sell to the tenants. Can you push them a little higher?
It’s also worth taking into account lost rent: if you put the house on the market, you’d need to get them out. Most people won’t look at a house with tenants in it, so they’d need to be out before it went on the market . So that could be rent of 2-6 months or more lost, depending on how quickly a sale went through.

I'd test the market first by putting it on with the ea. Then you'll get an idea of what people are willing to pay then adjust the price accordingly to sell to the tenants. Don't lose all of that money. Sure they've looked after the property but isn't that what you'd expect from a tenant as standard anyway? You've worked hard to buy a house in the first place, why give it away?

You have not actually got £550,000 though have you? It’s pie in the sky. At £550,000, stamp duty doubles over what they would pay at £499,000. I’d try snd get up to that but getting more could be difficult. Look at right move for sold prices. These are more accurate than thinking a school makes a 10% hike.