Advice needed: Buying house of landlord

[user1473756940]

We have been renting our current home for three years. a 3 bed terraced house. It was not in a great state when we started renting it, a bit tired looking and not had a lot done to it for a while. For example, carpets down to their underlay, 1970's radiators and gas fire, ancient boiler. When we moved in, the landlord did say these are things she was going to address asap. 3 years down the line, none of that work has been done, we didn't really push her for it as we didn't want to rock the boat too much. The other week, one of the radiator pipes rotted and broke and caused a leak. We paid for an emergency plumber to come out and fix the leak. A week later, we are given 3 months notice to be out the house as she has decided to sell and move away.

We had been looking to buy a house in the near future and she has said she would consider an offer from us. The house was valued yesterday and she has agreed an asking price of £136,500, she won't disclose to me the valuation figure. Based on the fact in selling to us she will cut out estate agents fees, and the fact we know significant work needs doing on the house immediately which would have to come out of our pocket if we bought it, and the £20,000 she has had out of us in rent over three years, whilst carrying out no maintenance on the property, would an offer of £118,000 be unreasonable?

We are able to make a deposit of up to £10,000 as a loan from my parents and we think we will get a mortgage.

You can offer whatever you wish. The LL can accept or decline as they see fit.

Yes I know, but obviously we want to her accept, I just wanted to see if anyone thought that is unreasonably low considering the asking price she will be putting it on the market for.

It may seem a daft question, but we are first time buyers and its all a bit new and we have been thrown head first into it, when we had thought it would be a couple of years off yet.

For my old 3 bedroom terrace that would be a great offer, for my sisters it would be an insult. You need to look at your local market and see how it compares to other properties. For all we know the valuation was £150k and she's requested less for a quick sale.

With regards to how under the asking price it is then again it's local market dependent my area houses are going for 10-20% under asking in my sister's area they are all selling at over asking price.

you know that the boiler needs replacing. What about the wiring?
If you know its run down I'd get a survey so you know exactly what you are dealing with and then take that money off the asking price plus the estate agent fees. Be quick, and let her know that you will be putting in an offer based on her price and what you know needs fixing. Once she's put it on with an agent she will still be liable for fees.

The rent you’ve paid over the years is irrelevant, that was just payment for a service you were receiving.

Research what similar properties in the area are going for, as she may have already adjusted the price to reflect the work needed. Or she might have priced at that level to take into account that people will offer less due to the work needed. nethouseprices.co.uk is useful.

Either way, offer to her directly as if you go through the agent she’ll be liable for their fee. Maybe you could split the difference so she saves half the fee and so do you? It’s got to have some financial benefit for her else she’ll just go via the agent.

The wiring also needs redoing. So that is another thing, we know needs doing. We had thought a survey may be costly, and would one need to be carried out anyway as part of us getting a mortgage? Or am I wrong?

The average house price on our street is £160,000 so the asking price is low for the street, I assume this is based on also the cosmetics of the property, as a lot of the houses down our street have been renovated and are in a lot better state than ours. Its a desirable area to live in literally metres away from the local primary school and a good secondary a few streets away, train station round the corner and it backs onto a park, its a great place which is why we don't want to leave it.

Just get someone to come and value it for you. She dies t have to know.

Sounds like she has already taken into account the work that needs doing in the price then? You can ask but I think you know what the reply will be.

First you need to see how much a bank would give you with that deposit.

I'd say £118k is low given the prices on the rest of the street for completed houses. Maybe £125k would be more reasonable?

If you rent through an agent then she may have to pay fees anyway.

I'd see as many other properties as you can to get an idea of what you think it is worth. Having done renovations, these always end up costing more than you expect so you might get better value buying somewhere that doesn't need so much work.

tatty dump, retaliatory eviction, incorrect notice - how are the legals? Gas safe? EPC? Smoke alarms? Deposit protected? Is that notice even valid?

rent paid so far is irrelevant, offer what it is worth.

The rent you've paid her is irrelevant IMO.
The valuation would probably cover the work that needs doing.
You can offer whatever you like, but whether or not she will accept is anyone's guess.
What's the market like near you? Recently sold prices?

It's a bit too low and you risk putting her back up. The rent you've paid and the work she has or hasn't done us irrelevant it's the market valuation you need. She may save on ea fees but you will save on moving costs. I'd say move quickly once it's marketed she may be locked in so get an ea round get a valuation get a mortgage offer. If she thinks it's worth 136, then 118 is taking the piss and she may as well market it.

Just get a different agency to come and value it for you and go from there. They will do it because it is in their best interests to know the stock in the area.

If you rent through an agent then she may have to pay fees anyway.
That't not true. I've bought from my landlord in the past and there were no agency fees for the seller.

tbf, we put in a 90% offer on our house and were almost accepted (EA pushed up a tiny amount, I suspect to cover their own fees). 90% of 136 is c.122 so 118 not miles off. HOWEVER that entirely depends on how she feels as a seller, how quickly she wants to sell, etc. Our house had been on the market for some time and the previous owner wanted to move. We were chainless FTB.

I sold to tenants about 20 years ago because they made me a sensible offer. I also sold a house I inherited privately. From the info given what you are thinking of offering looks low - 25% below average for the street? As others suggest best to get your own valuation and take it from there and / or ask to see the one the landlord has had done (I am in Scotland so the homebuyer report makes this standard for us).

The rent paid so far is irrelevant as are any savings the LL may make by selling privately. To set against it you have to weigh up that you get to buy where you are already settled and you know far more about its pluses and minuses than if you bought elsewhere. However if you are not happy living there long term then may be better to pass.

Have you already looked online at what similar houses in your area have been sold at? Tbat should be your starting point. Look out for for sales signs, Ask estate agents in the area what they would suggest.

Your post seems to focus entirely on what you can afford. While that is important, knowing what someone else might offer for the house will help you to know the price at which you are a tempting prospect. If that is higher than you can afford....

All the best.

Agree you need to learn about the local market yourselves in more detail, as well as checking what you can actually afford, before you put in an offer. I think getting a survey of some sort prior to offering could be a good option in your situation; perhaps discuss a mortgage offer first and then, once you are sure you can get an offer, get a survey before putting an offer in. But let your landlord know you are seriously considering it and starting the process. A sale in your situation should proceed a lot quicker than most once agreed and if you have started doing things that might normally happen only after an offer is accepted, your landlord should be happy to wait a little for you to decide your offer. But get on with all of this quick. Good luck!

The offer (£118,000 against an asking price of £138,500, in a road ceiling price of £160,000) instinctively seems low to me, but you should get a couple of agents to come out and give you valuations (you need to leverage every advantage you have!).

Agree that the fact she's been a poor landlord, and that you've paid over the odds for several years is irrelent to the value, or to your negotiations. But where you do have some leverage is that by selling to you, she'd get rent right up to the day of exchange (versus having an empty house, starting the marketing, sales falling through, no income etc). That must be worth a good £10 K+ discount so make sure you point this out if/when you do make an offer, along with the no agent fees. Those two combined, I would think you could prob go in at £15-20 K lower than market value (i.e. what someone else would buy it for).

As other PPs have said get estate agents round for independent valuations and also pay for a full building survey so you know exactly what all the costs of new boiler, rewiring and whole renovation is going to cost you. When you have those figures you'll have a better idea of what would be a reasonable offer.

You could make an interim offer to see how the land lies with your LL but I'd suggest between £120 - £125K which can be adjusted once you have got all the costs worked out (see above)

What you have paid in rent has no bearing on the price the LL is asking for the house now she is selling. Good luck.

Sorry original but those figures are way off did you add an extra zero by mistake?

I do agree that the biggest benefits to your landlord is rent up to the day of completion and no ea fees but that won't be £10,000 plus discount and needs to be offset against you not having to move.

Thanks all for your thoughts.

I think we will up our offer a little to £120,000, I am also conscious that she is likely to turn down our first offer to try and get a higher one out of us.

We are going to let the dust settle for a couple of days and let us sleep on it a little and make an offer to her. We have a Decision in Principle for a mortgage saying we could borrow up to £190,000 so we should be ok but didn't want to end up with a mortgage that is higher than our current rent in an effort to keep ourselves living comfortably without pushing our finances too hard as we know we can still afford this off one income.

You are suggesting making an offer at your maximum straight away. Don't do it! Definitely get some valuations yourself first.

When we bought our flat from our landlord we had 3 estate agents value it and took the mid point range. It was a very open process.