Buying off landlord, what next?

[xXwhenwillitendXx]

LL has offered to sell us his house that we are currently renting (have previous threads). Estate agents came round yesterday to value the property, he was only here a matter of minutes, but not sure what I was expecting.
We are now waiting an email off the landlord with a price he wants for the property and then we can get onto the morgage broker to see if we can get the morgage (we know we have affordability but still unsure if we can get an actual morgage woth only 5% deposite)
So what happens next.... should I accept offer before we have morgage in principle, should I push for a lower offer first, should I wait for a morgage in principle before accepting any offer / sending a counter offer, or should I get a survey done and then make an offer??
This is still all very new to me as I've never even dreamed of purchasing a property so any advice will be great.

If I were you, I’d check out the mortgage situation first, and what the monthly repayments would look like in your budget (including if interest rates rise, which they will). Then you know your parameters in terms of affordability of the specific house you’re living in. And make sure you get a survey!

Will deffo get a survey, but do I do that before or after I put in an offer (sale will be private so won't be on the open market unless we decline) with the interest rates how does that fair with a fixed rate?? And is it worth getting 2 year or 5 year fixed rate??

Make sure what you pay includes the fact that the LL won't be paying agents selling fees and that by selling to the tenants they are not going to have a void between you moving out and completing on the sale. It's difficult to sell a house with tenants in so usually it would be empty for a few months and the LL will have to factor in the loss of rent for that period.

Check current prices using houseprices.io/ . If you see a lot of 'red' properties in your area then it suggests that prices are heading downwards. Regardless, do not overpay. Get the longest fix you can afford/achieve (even 10/15 years) and set up repayment term for as short as possible, e.g. 20 or 15 years. That way you'll build up equity much quicker (or reduce the negative equity you'll face if house prices collapse).

Consult your solicitor to identify any potential pitfalls to living in the home before it is yours.

I would check the mortgage situation before anything.

And make sure you get a survey! Yes - but as you are already living in the house and have been doing for some time I imagine (you don't say how long) you already know far more about the house than most people do when purchasing a property. We also bought our first property from our landlord (in France so legal ins and outs probably slightly different - in law he was obliged to offer it to us before putting it on the market). We had an idea what similar properties would cost having looked around and also visited a couple. Nothing else ever compared though because the place were living in felt like home - I've never felt more sure about a property purchase. It's vanishingly rare that you get a chance to try before you buy with a property. I would think of making an offer before agreeing to pay the full price - you are in a very strong position providing you can get the finance. It will be much more straightforward from the landlords point of view to sell to you which gives you a big advantage. Good luck.

@XVGN

Check current prices using houseprices.io/ . If you see a lot of 'red' properties in your area then it suggests that prices are heading downwards. Regardless, do not overpay. Get the longest fix you can afford/achieve (even 10/15 years) and set up repayment term for as short as possible, e.g. 20 or 15 years. That way you'll build up equity much quicker (or reduce the negative equity you'll face if house prices collapse).

Consult your solicitor to identify any potential pitfalls to living in the home before it is yours.

@xXwhenwillitendXx

It’s terrific news that you may be able to own your own home. Hopefully the landlord’s asking price will be fair.

You do need to work out what you can afford as well as what the house is worth before deciding whether to offer their asking price, or whether to offer less. XVGN advice not to overpay is good advice.

“Get the longest fix you can afford/achieve”, however, may be good or bad advice, depending on your circumstances. If you need to move due to any change in circumstances (change in employment, change in relationship, needing more space due to having more children, needing to live in a different location for any reason), then you will likely face penalties for early prepayment, which are higher if the fix is longer. Also, if you were to have extra money available with ability to pay down the mortgage faster and lower your interest expense, you won’t be able to do that. Conversely, if you were to lose your job and couldn’t carry the mortgage, and hence needed to sell, that loss would again be compounded by penalties if there is a long fix.

On the positive side, though, interest rates are still pretty low, and a long fix gives you clear visibility onto how much you need to afford for the mortgage payments. So if you have stable income with good employment security, a settled personal and professional life, and high confidence that you won’t need or want to move, and a general appetite for certainty, then my all means the 10-year fix can give you Some of that.

Just remember that certainty in most things is an illusion, and 10 years is a long time during which changes can happen. Personally I would not want to go beyond a 5-year fix unless I needed longer to get the debt down to levels such that I could afford a sizeable interest rate increase upon renewal.

We bought the house we'd been renting for eight years. The landlord wanted a quick sale so we managed to buy it for a fifteen percent reduction on the agent's valuation. We were clear with them that that was the absolute limit of what we could afford but they saw the benefits of a quick turnaround, no voids to the rental income and not having to redecorate the house before putting it on the market. So don't underestimate what a good position you're in when putting in an offer.

Get the mortgage in principle before you put the offer in! You need to know if you can actually afford it.

It's the morgage that's worrying me. DH had cancer in 2017 and was out of work at the time. He couldn't afford his bills. He ended up getting a short term loan with a company called safety net, during his operation and recovery he missed 6 months worth of payments then when he realised what he done he paid it off in full. I've know this is going to go against us and we won't be accepted for a morgage.

Go and see some mortgage providers. You are paying the rent I assume - how much more/less would the mortgage be? You have a small deposit. Your DH has paid off his loan. Go and find out how much you can borrow - you don’t need to wait for the valuation, you know the rough ballpark figure. Find out how much you can get then you’ll know where you stand (bearing in mind the LL will almost certainly be open to an offer if it saves having to put the house on the market). Good luck

Make sure the LL has got several valuations (3 would be usual).

Understand you’re in a strong position and negotiation on price is the norm in all purchases. When you’re in a strong position, you expect to be able to negotiate the price lower.

If you’ve never bought before, watch out for the LL trying to fob you off with just 1 valuation or push for asking price or very close to it.

Do not seem to keen or desperate. Make clear you’re considering this property and would like to buy it for convenience and because you like it BUT only at the right price and you’re happy to look elsewhere if necessary. This is really important.

Don’t spend money on things like surveys until an offer is formally accepted and a solicitor has been appointed and a mortgage offer in principle at least received.

Given you won’t be suing EA, make sure everything in terms of offers, discussion, acceptance of offers and terms is in emails and also that you both appoint solicitors early on and get it all confirmed. Do not rely on conversations. Push for clarity in writing on anything not clear.

So make sure your LL knows you’re expecting 3 valuers to visit before it’s priced. When you receive the valuation, give some time to comparing it to recently sold prices and prices if similar houses for sale at moment. Expect your first offer probably won’t be accepted and you’ll have to increase a bit…..make your offer to include any fixtures or fittings you’d want LL to leave (given its rented this should be straightforward and you wouldn’t expect to pay extra for them) and as you make your offer, make clear it’s an offer to reflect the convenience to them of selling to their tenant, no void periods of rent and no EA fees, along with the fact you really want to buy it, but can only do so at the right price. Stress you have a solicitor in place and mortgage in principle and can proceed as quickly as they would like. If you have to increase your offer, make clear what you’re offering is the absolute most you can pay.

Good luck. It would be great if this comes off for you. Don’t pay over the odds though.

Thankyou so much everyone for your wellwishes, support and advice.
We do love the house but this has given me the confidence to look elsewhere if the price is too much for us, and also the confidence to try and negotiate prices.
Just really hope we can get a morgage.

Do not seem to keen or desperate. Make clear you’re considering this property and would like to buy it for convenience and because you like it BUT only at the right price and you’re happy to look elsewhere if necessary. This is really important. Some great advice there from Wombat. You definitely should look at other properties within the price range - you might find something you prefer! But first of all see a mortgage advisor so you know what your budget is.

Check out who is doing the valuations. Ea valuations, mortgage company valuations, independent values... will all value very differently!!

So we have had the valuation, it's 10k more then we would like to pay. We have also been had our decision in principle for 20k more then asking price.
He has asked for our decision on Monday .
What's thenext step?? How how can I word an email??

@xXwhenwillitendXx

Just found your thread again, how did things go??