Advice needed! Landlord is selling...

[HowToBuy]

I'd love some advice ladies...

Was given notice this week that my landlord is selling up. Have been here 5 years, in the area for 12, it's 10mins from work and my teenage DC school, 5 mins from my parents and we're pretty happy here. Notice is 6 months.

It was my agent that gave me notice so have yet to speak directly to owner. I apparently have first refusal and should make an offer.

The rental market is dire where I am (I'm in Ireland)... literally nothing suitable for under €500 more than what I'm paying now. There are also zero houses to buy.

I think I have to try and buy this house. My plan was to emigrate when my DS went to college, but he has 3 years left so I need stability for him for at least 4 years.

My budget isn't huge, I can maybe get €240k maximum which is probably the lower end of what the property would go for. I think if it went to the market, it would be €250k - €275k.

My work contract expires in August so I have asked to fast track this with a raise by the end of this month. (Sickeningly I just had an incredible job offer I now need to turn down because I won't get a mortgage on probation).

I have an appointment with mortgage broker tomorrow.

How can I position myself best to buy this property? What can I highlight to reduce the price?

If it's a straight sale then we don't need a real estate agent so he saves that fee. Presumably straightforward with solicitors as well so he'll save there? I'm also in situ so he won't have any loss of rent, whereas it might take a while if it goes to market.

There has been zero maintenance done on the property, except by me, since I moved in. It's across from a, now very loud, business that has expanded majorly in the last 2 years so that would likely affect the price.

Do I need to get a structural survey before I make an offer? Should I have it valued myself?

I'm honestly clueless, please help!

Bumping because I really need some advice to get my thoughts and actions in order!

I would get an estate agent round to value it. But ultimately if £240k is your max anyway, go in strong with that offer and see what they say.

Are you really sure you want to buy it though, for only 4 years? £500 extra monthly rent on another place would be £24k over the next 4 years - would this be similar to stamp duty, survey and solicitor fees? You then need to factor in selling fees in 4 years time plus any renovation costs you’d need to do to sell it.

If home ownership was in your plans anyway, then I would go for it. But if not, I’m not sure I’d choose to buy just because you’ve been put in this situation.

I don't have any advice, but I want to wish you good luck!
I hope it will all work out for you.

Thanks so much @BooomShakeTheRoom I didn't even think of stamp duty, just looked it up and it's 1% I think. Another thing to factor in 😩

I had pretty much given up on the idea of home ownership in my area, it's just impossible when you're single, which is why I was planning to leave the country.

My plan was to settle DC in college and then buy somewhere with direct and cheap flights for him to come to me on holidays and long weekends. But this is kind of forcing my hand... for context, there are currently 5 properties within a 30km radius available for rent. The only one that would be anyway suitable is +€500p/m more than what I'm spending now.

I'd like to think that with stamp duty (€2.4k), solicitors (€No Idea 😭), and survey (€800) it would probably still make sense to try and buy?

I'll call a few estate agents and enquire about a valuation.

I want to go in with a strong offer, but I want to position it with 'mitigating factors'(?). So discounted price for ease of sale, he won't have to paint or do anything to sell it, no real estate agent. I just need to figure out what that's worth.

Should I do a structural survey too with the valuation before I make an offer do you think?

I believe as a tenant, you can get a concessionary purchase mortgage, for the property you currently live in. Think there's a possibility that the rent you've already paid goes towards a deposit, but spk to a mortgage advisor. Good luck

Oh my god, you're so kind 😢 Thank you so much x

I honestly feel so useless and alone, I'm almost late 30s, good job but this seems so difficult, almost impossible, when you're on your own.

Had never heard of this so thank you so much. I've given a quick Google and think this may be UK only (I'm based in Ireland) but I'll keep looking into it.

Thank you x

On that basis OP, I’d go for it.

You need to do things one step at a time.

1. speak to a mortgage broker. Find out and confirm the max you can comfortably borrow.
2. get a valuation from EA.
3. ask the landlord if you can have a chat about it. Explain that as a single parent you have a limited budget but due to the reasons you’ve stated, the max you can offer is £xx. I wouldn’t recommend playing around and going too low as you’re in the weaker position here. If you really want it, go in strong, explaining that it’s all you can afford.
4. surveys are recommended but not essential. You live there so know if there are issues I’d imagine?!

This is exactly the kind of step by step advice I was after @BooomShakeTheRoom thank you so much. My head is addled and I have no idea what to do and when and I'm kind of freaking out.

The stamp duty you pointed out I hadn't even thought of, that is going to have to come off my budget, that's thrown me again this evening. I need to start a list of extra expenses to consider when buying a house so I don't miss anything.

I have no clue what I'm doing and honestly, I feel like an utter failure in life. I think I should just sleep now and tackle the whole thing with more positivity again tomorrow.

How tricky for you, hope it works out.
I'm on a few property groups for English landlords and many people are nervous about buying a property with tenants in situ as they sometimes stay put to support work council housing.
You may find your landlord look favourably on your offer.

If you’re getting a mortgage @HowToBuy then your Lender will organise a “valuation survey” which is very basic but does tell you what they consider the property is worth. You have to pay for that but EAs will give free valuations (these often err on the optimistic side though whereas the Lender valuations may be lower). However, I’m not sure where you would stand as a tenant asking an EA to value the property as this sort of request would normally come from the owner who is a potential new client for the EA.

I think your first step should probably be to contact the owner of the property to let them know you are possibly interested in buying it if the price is reasonable.

You don’t have to get a full structural survey, that’s up to you.

Thanks so much @watchuswreckthemic I'm really hoping he just wants a quick sale and will let it go for under asking to do that.

This is good to know @Twiglets1 I'll ask my broker tomorrow about lender valuations. I didn't even think of the fact an EA may not want to value the property because I'm not the owner.

I've asked for a direct conversation with the landlord to try and work out what he would be willing to accept. While €240k is probably the biggest mortgage I can get, I'm still €6k off the deposit required so I'm going to have to beg, borrow, steal, scrimp and save to get that together, not to mind the additional costs (stamp duty!)

I'm actually so overwhelmed 😩

Probably another stupid question, but can I use the mortgage to fund additional fees like the stamp duty?

For arguments sake, can I draw down €240k, use €10k to pay solicitors, stamp duty, surveys etc and offer the rest to the seller?

It is a landlord’s dream to sell to their existing tenant. I only know from an England law perspective, but here, the landlord can’t really hope to sell until you have vacated. So first, they have to give you 6 months’ notice, then hope and pray that you actually leave. If you don’t, you may hang on months and months for a court order then bailiffs to get you out. They have to pay for those costs. So their sale can be delayed for a year or more - which is no fun if they have mortgage costs that they are struggling with for any reason. After all that they can clean, fix up and market the property. They may need to pay for removals for any remaining furniture etc. They have to pay taxes, insurance and utilities during this time. Their buyer may pull out at any time.
if you offer to buy it, they face none of these risks and expenses!
They may still have to pay estate agent fees, unfortunately, as it is sometimes written into the contract that if the tenant they found buys it, they get paid.
But I’d say that the ease of sale to you should be worth at least 15k.
on your side, it is cheaper than any other purchase as you have no moving costs and don’t have to worry about leaving the rental and meeting inventory check standards, etc. Most people have substantial moving in costs to a new place as they have to fix things and have a strong desire to redecorate.
Whether or not you get a survey is up to you. You know the property intimately already, but there may of course be things that you don’t understand regarding the bones of the property, and a surveyor could help with those things.
The most important thing is being able to prove to your landlord that you can afford any price you agree. This is done by getting a mortgage in principle decision that shows you will be able to raise the funds.
I think this is an extremely good opportunity for you. It sounds like you only wanted to leave in order to afford to buy… but here you are with a viable option. Good luck!

Not a daft question at all but no the mortgage can’t be used for stamp duty, solicitors fees, survey etc so if you have any savings you need to keep these for expenses buying this house & potentially offer a bit less on the purchase price. You will also be expected to have a small deposit of at least 5% of the purchase price so €12k on a €240k house. There are some Lenders that offer 100% mortgages but then the interest rate will be higher so best to avoid those if possible.

Remember that just because you can borrow up to €240 doesn’t mean you necessarily should offer that amount. Your goal is to pay the least you can to secure the property. And the LL should hopefully offer you a good deal as it’s easier & cheaper for them to sell to their existing tenant.

I'd buy if I was you. Then you could rent it out when your son leaves and rent abroad where they likely have better regulations!

I'd check that you definitely can't get a mortgage on probation where you live before you turn the job down - I managed to. They just wanted three months proof of salary

Make sure you hear the valuation or that landlord puts it on market before you make your offer. My former landlord said a flat we lived in was valued at 89K (and it had problems), we said no because we spotted a lovely 2 bed semi-detached for 85K (which didn't have any problems just needed a lick of paint) amd would go for that instead. It was but on the market at 69K so just be careful.

@Twiglets1 is right. I’d contact the LL first and have a chat with them. I’m a LL and would look very favourably at the chance to sell to my tenant.

Why not take the job and ask for a reduced probation period?

Would your landlord extend your notice a month or two? Having you buy would have time money too, and possibly time.

In Ireland you also need compulsory mortgage protection insurance. Depending on your age and existing medical conditions this is quite expensive. Another factor to consider. FYI we pay €280 a month for this.

A structural survay can give you a list of future costs (new windows now or 2-5 years, new electrics for extra appliances etc insulation values) so if you can get a decent one it can be worth is as it can down value the house.

Plus if you are planning on renting it can be used to highlight changes needed to bring up to the current building regs as the Irish government are going to squeeze small landlords out of the market.

The good news is if you are underpaying rent by 500e per month your LL has already "walked away from" near 30k during your rental period. so unless you are in a rent control area ROI was not a massive factor in the decision making process.

No Phantom110 you dont so you may want to check if your personal circumstance put you/partner in one of the listed classes

That is disability and age discrimination :

https://www.citizensinformation.ie/en/housing/owning-a-home/buying-a-home/insurance-protection-on-mortgages/

You do not have to take out mortgage protection insurance if:

• You are over 50 years old
• The mortgage is not on your principal private residence (your home)
• You already have enough life insurance to pay off the home loan if you die
• You cannot get this insurance, for example, because of a current serious illness or dangerous job

Morning all,

Thanks again for the responses

@notafraidofthebigbadwolf this gives me some hope. I've been a really good tenant for the last 5 years so I'm hoping that he will be able to judge my character from that and know that I will do everything I can for a quick sale, given the right price. I have a meeting with a broker this afternoon so hopefully can sort the mortgage in principle asap. I have MIP from my own bank already, but the rates are too high so I must look around. Thank you for your well wishes x

@Twiglets1 ugh, I did think that I wouldn't be able to use the mortgage funds for the ancillary expenses. Going to try and tackle with positivity today and get a spreadsheet of these expenses going. Unfortunately in Ireland you need a minimum of 10% deposit so I need €24k for the upper end of my budget. I have a €19kish that I can access immediately, and will need to scrimp, save and try to borrow the remainder if I need to offer €240k... I'm really, really hoping he will take less.

@Flowersinthehood renting out the property has definitely crossed my mind and given the rental rates, I would be confident that it would cover the mortgage. There is also a spare room so I could potentially do AirBnB during the Summer maybe to help pay off the mortgage a little quicker.

@Thegreyestate the issue with the new job is that my base pay would be €7k lower than my current role, which would affect the amount I could borrow. The commission would make it €15k a year more than what I currently make, but the 1st 2months of the role is training so therefore no commission. They've been really understanding and hopefully the opportunity will still be there in 6 months time.

@CinnamonBuns67 my fear is that if it goes to market at all, I'll be outbid. I'll definitely try get a valuation of my own though.

@Ohyeahwaitaminute my agent has just rang and said he will try and get an indicative figure for me this morning from the landlord ahead of my meeting with the broker this afternoon.

@DisforDarkChocolate unfortunately it just doesn't make sense to take the role. Ref: the not on commission above.

@Phantom110 oh god, another thing to add to the spreadsheet. If it's a monthly payment, as opposed to another big initial outlay that would be okay though I think.

@AnSolas this was my thinking as well about the structural survey, that it could highlight potential future issues and bring the price down further.

I am in a rent pressure zone. When I first moved in they wanted €150 more a month but I told them I wouldn't take the property at that price. I think they saw me as a reliable tenant so gave it to me for the initial rent I was paying. I've had 1 increase in 5 years of the maximum 2% they could raise in a RPZ

To be honest, the house isn't worth an extra €500 a month extra, nor are the few others that are available, the rental market where I am is just gone insane (tourist hotspot).