Tenants buying house have asked me to pay for investigations and repairs

[Wonderifitsme]

Have not sold a house before and have no-one to ask on this.

I moved abroad a couple of years ago and rented my (v nice) house to some nice tenants. They wanted to buy the place and I agreed, at a slightly lower price than the estate agent valuation range for the ease of having a secure sale etc (think valuation range 400-450, agreed 390).

they have had a survey, great, which has come up with an internal leak in the upstairs ensuite, possibly making a damp issue in floor. They have asked me if I am willing to pay for further investigation and for costs of repair.

Gut feeling is that this is not right. Surely costs of further investigations are borne by potential buyers and then you negotiate on price. Since I agreed a price at below 3 estate agents’ estimates I’m loath to renegotiate further. But are my instincts right? Tia

The property market is absolutely dire atm and the agents valuations will have been generous. If on the market now if probably wouldn't sell as there are hardly any buyers out there, and loads of properties all just sitting there.
The price you have agreed is probably a realistic price not generous, and in the circumstances I would just sort the leak out. (We are currently on market and dropped 75k and still not a peep of interest and virtually no viewings)

A house with tenants in will always be priced lower than an empty house. If you were to sell on the open market, you would have to factor in the potential hassle of getting the tenants out.

Tell the buyers you want the leak fixed immediately.
But that means that your property will have to go for sale on the open market at the estate agents valuation or, if they still want to buy the property, you will sell it privately it at a new price to them. Obviously the new price will include the original price to them plus all (or a portion of, if you can afford to be generous) the cost of repairs you have made.
They may well come back to you to say they will fix the leak themselves, given they haven’t ever noticed it whilst living there.

Sometimes the barrier here is partly to do with the hassle of organising someone to come in and check/do repairs in advance.

You could offer to make the arrangements and then agree a half-way point on costs. Compared to the overall move, the costs involved will likely be small.

This really.

There's being nice and there's being a mug.

That’s quite a presumption that OP will be able to match the existing offer, or indeed find another buyer at all for quite some time. Market is awful for selling atm.

Estate Agent valuations are often on the optimistic side, especially in the current market. Chances are you'd be looking at that sort of price in the open market anyway with a void period re rental income.

Not everywhere, OP has already confirmed it's not the case where she is.

If you’re in no rush to sell or think the house will get another decent offer on it, I would just say because the agreed price is £60k lower than market value the house is sold as seen. They can either decide if they want to go ahead with the sale or not. However if you’re desperate to get rid of just pay for it or use home insurance

If you think (with some certainty) that you can get a lot more on the open market, then tell the buyers that the price of the house was substantially less than the price that estate agents were quoting and, as such, it is sold as seen. If they don't want to buy at that price, they should let you know so you can give them notice and sell on the open market.

As things stand, you are their landlord and have an obligation to repair leaks.
Do you want to risk being stuck with a damp mouldy house?

No she wouldn’t have a point. As seller, she is responsible for the house in its current state and would be responsible for any investigations or repairs. It’s still her house - her responsibility.

They will likely (should do anyway) want this sorted before exchange.

I think that, regardless of selling the house, you would need to deal with the leak.

At least then you both know the cost of sorting out the issue. You can then tell them that, if you fix the leak and make good, the minimum you can get to is £395k (say) as the £390k agreed was ‘as seen’.

It is all up for negotiation and depends what it would really fetch on the open market.

1. It doesnt sound like a big leak problem, get a plumber in and it probably wont be more than a couple of hundred.
2. It's your house, you need to fix a leak ASAP!!

This is exactly what happened to me this year as a tenant. Landlady evicted me to put it on market at a “fair market” price in March. Following 2 price reductions she has just taken it off market as no buyers interested. Also it’s been sat empty with no rent since I left.

In the meantime I’ve taken advantage of what is very much a buyers market, loads of choice and negotiated an excellent reduction on a much nicer local property and completed in June.

I’d be very wary of that estate agent valuation OP, those prices aren’t achievable in the current climate. You have a buyer in hand at a price you can live with, I think you’d be mad to lose them over a relatively small quibble. Could you offer to share the price of the investigation?

I’d fix the leak since they are still currently tenants. Also it’s hard to sell right now so you don’t want the sale to fall through. If they pulled out and you sold on the open market you’d need to fix the leak anyway.

I suspect this. I don't think there is a usual way of doing things. If it was me I'd pause the sale, get the leak investigated and fixed and then depending on that cost, reset the selling price. in the past we did ask the seller to fix things that turned up on the survey but we were paying full asking price.

As the current landlord you’d be obligated to fix it. I’d say given the current discount they shouldn’t it, if they say no - fix it and then put it up for sale at the valuation price.

You’re not really going to be fixing it as part of the sale though, you’ll be fixing it as their landlord. I personally think you were silly to give such a massive reduction. The most I’d have given would be enough to cover solicitors fees.

This?
how would you feel if it was you?

yes you’re selling slightly under market price but you have people who want the house -
if you put it up for sale at £4-450k it could be up for sale for ages, the tennants could move out leaving you with no rental income and you could get involved in a big chain which could collapse.

i think you’ll have to go with it as the price was agreed with no leak on the horizon.

Its not a £60k discount though

many houses are over valued and there are thousands of houses daily having to lower the asking price, as they have started with an over inflated price. If you look on right move £20k decreases are becoming the normal.

OP may think the house is in a prime position with schools but the reality is most probably very different

If they evictt the tenants, that will take 4 months. Then the property has to be empty for one year as they can't relet within a year - so if the rent is £1400 per months thats £16,800 of lost revenue.

Its cheaper to get a plumber out and fix the leak

Say no and if they don’t agree you can put the house back on the market. It’s their choice

Thing is now you know about the leak, you’re going to have to fix it anyway to meet your legal responsibilities as a landlord. They are still your tenants with associated rights regardless of your sales plans.

I don't think they're wrong to ask but it's all part of the negotiation. It depends which of you is most likely to walk away. I'd guess you're in he stronger position.

The problem with selling to a tenant is the they’re mixing up the relationship with that of a buyer.

If they carried on renting it would be down to you. But you’ve entered into a new relationship now, they’re seeking to buy, at a considerable discount. They have a lot on their side, not having to move, being able to buy into a desirable area without competition or risk of gazumping.

I don’t think you should pay for the investigations, I would treat it as a buyer’s further survey which is generally down to them.

Hold your nerve OP, and gently remind them of the discount they’re already getting. If they could live with the leak as tenants, they can manage it as buyers and sort it out for themselves.