Potential to sell house to sitting tenant. Advice?

misc2013

Selling my house in Spring. Tenant has expressed an interest in buying but is still mulling over it. He's also looking around which is fine because the house should sell easily regardless. House has been valued and he is aware of the market value and it's consistent with similar houses in the area. Am wondering how best to proceed. Should I put house in market and if he is serious nearer the time then offer him first refusal on my asking price?

Cash_Q

If you haven't already done so, Issue formal notice and statutory declaration that you intend to sell, regardless of his possible interest. Then you're covered in the event that he's not really interested after all.

antix80

Don't offer first refusal or do or say anything that could be perceived as rent to buy, an option to buy, etc. They may argue they only continued renting because of a vague promise you made.

Be especially careful if you're not using an estate agent. Estate agents can and do say what they like, only to gazzump or back out of "sale agreed"

If you're selling it yourself you have to be careful to ensure your potential buyer knows that nothing has been previously agreed and everything is "subject to contract", because if you agree something verbally they can sue you to honour the agreement.

Never take a deposit. Only your solicitor or estate agent should handle money.

Anyway, I'm not a solicitor. So hire one and use him/her before agreeing anything with your tenant. Things can get murky.

misc2013

Cash_Q wrote: »

If you haven't already done so, Issue formal notice and statutory declaration that you intend to sell, regardless of his possible interest. Then you're covered in the event that he's not really interested after all.

That's done and he's got his notice.

misc2013

antix80 wrote: »

Don't offer first refusal or do or say anything that could be perceived as rent to buy, an option to buy, etc. They may argue they only continued renting because of a vague promise you made.

Be especially careful if you're not using an estate agent. Estate agents can and do say what they like, only to gazzump or back out of "sale agreed"

If you're selling it yourself you have to be careful to ensure your potential buyer knows that nothing has been previously agreed and everything is "subject to contract", because if you agree something verbally they can sue you to honour the agreement.

Never take a deposit. Only your solicitor or estate agent should handle money.

Anyway, I'm not a solicitor. So hire one and use him/her before agreeing anything with your tenant. Things can get murky.

I'm probably going to have to put it in the open market. If he's interested I guess he'll need to bid like the next fella but I could advise the estate agent to give hi. First refusal if he reaches the asking price?

Stanford

Absolutely not..!! The Estate Agent is putting the house on the open market by way of Open Treaty i.e. the Agent is obliged to get the highest price which maximises your sale value and his commission, this is like an auction where the highest bidder wins, it may be that you will get offers higher than the asking price, why would you refuse those.

Selling by way of a Private Treaty to this person may not maximise your return and could qualify him as a "preferred buyer" which may ultimately compromise you legally.

antix80

misc2013 wrote: »

I'm probably going to have to put it in the open market. If he's interested I guess he'll need to bid like the next fella but I could advise the estate agent to give hi. First refusal if he reaches the asking price?

Don't use the term first refusal to your tenant. First refusal is a RIGHT. You're basically saying if they continue paying rent they gain a legal right to buy your house. Good luck explaining that arrangement to your solicitor.

Best option is to let your buyer know when it's going to market so they're ready, and if you're happy with their offer and there's none higher go sale agreed relatively quickly.

Option 2... . Discuss a price with your tenant. Let them know it's subject to contract.
Don't: shake hands, take a deposit, hint that it just needs to be rubber stamped, send a text confirming the price you discussed, have celebration drinks, tell them you'll knock rent off the price, or let your tenant do any home decor in preparation for the sale.

Tell your solicitor your proposed arrangement. He'll likely tell you to get a valuation done - perhaps more recent tgan your existing one (Valuations are often the price properties go to market, even though they may sell for more.).
The advantage of doing it this way is you will save on estate agent fees but you may not be getting the best price.
Your solicitor will write up the contract.

Don't get stung op. No good deed goes unpunished.