As title.

We have a house that is currently rented out whilst we live in military accommodation.

The tenants were speaking to my wife’s parents the other day and expressed an interest in buying the house from us should we wish to sell it.

Are there any pitfalls to doing this ? As there is no Estate agent involved I guess we can save on those fees.

Thoughts welcome.

Cheers.

You save on the Estate Agents, and there’ll be no rent gap. They’re buying a known quantity and don’t have the hassle and expense of removals. Win-win I’d say if they’ll pay the going rate.

Establishing a true value if you don’t actually market it can be tricky.

Is there a letting agent involved? they may be entitled to a fee if you sell to the tenant.

well, yes it would be good if as above you can establish fair valuation.
No hassle with selling with sitting tenants, remove admin (though also the income stream).

CGT on the house value? as it may or may not be your main residence (just thinking out loud).

If everyone agrees, easiest to get valuation is to get three quotes and settle on middle or average or whatever. Whether that is acceptable to them is worth chatting about. Or if they have a price in mind, they may see it as a bargain which is not your view.

Thanks all.

We are renting it through a letting/estate agent currently so need to check our contract as someone has mentioned they may be a clause in it about selling.

Not sure on the cgt thing as although we live in married quarters the house is still classed as our only house if that makes sense. When we remortgaged to a new lender we didn’t have to pay cgt on the amount it had gone up in value by.

We are renting it through a letting/estate agent currently so need to check our contract as someone has mentioned they may be a clause in it about selling.

In a similar position – our agreement would see us giving practically the same amount to the letting agent if we sold to the tenants as we would give to an estate agent if we sold to anyone else.

Be interesting to see how you get on with the CGT. Do you do a self assessment i.e. is the taxman aware that there is a rental income on the property?

edit – re CGT this is the list of occupations where exemption is applied:-
The main occupations which satisfy the rules for exemption are:
• agricultural workers living on farms or agricultural estates
• lock-gate and level crossing gatekeepers
• caretakers who live on the premises for which they are responsible
• stewards and greenkeepers who live on the premises they look after
• managers of public houses who live on the premises
• wardens of sheltered housing who live on the premises where they are
on call outside normal working hours
• police officers and Ministry of Defence police
• prison governors, officers and chaplains
• clergymen and ministers of religion, unless engaged on administrative
duties only
• members of HM Forces
• members of the Diplomatic Service
• managers of newspaper shops that have paper rounds
• managers of traditional off-licences, that is, those with opening hours
equivalent to a public house
• in boarding schools where staff are provided with accommodation on
or near the school premises – the head teacher, other teachers with pastoral
or other irregular contractual responsibilities outside normal school hours
(for example, house-master), bursar, matron, nurse and doctor
• veterinary surgeons who live close to the practice in order to respond
regularly to emergency calls
• managers of camping and caravan sites living on, or near to, the premises
• stable staff of racehorse trainers, who live on the premises and certain key

You should be fine if in the forces.

My sister bought the house she was renting, went through with no problems at all.

She did a deal with the landlady where they agreed a price that was more than she would have got after estate agent fees but less than market value. There was a similar situation where the letting agent was due a fee but they agreed my sister would pay this as it was a similar amount to moving costs and finding a new bond etc. I think it was equivalent to 12 months of their letting fees, worked out at just over £1500. It helped that my sister really liked the house and the landlady was looking for a quick sale.

Personally I would consider it as you have a ready to go buyer and don’t have to worry about it sitting on the market for ages or being messed around. The longer the sale takes the more rent you get! That’s if you want to sell.

I bought my flat of the landlord. I had to ” make it worth his while” ie I paid slightly over the odds for it but other than that no pitfalls or traps

The house I’m sitting in right now was bought from the owner when we were tenants. No hitches, saved us both a lot of money and we’d already moved in.

Just get your lawyers on the case, no problems.

Another thing for us to consider is early repayment charges on the mortgage being quite high for the first year. We have only paid 3 months payments so far so would have to factor this in aswell.

Lots of stuff to ponder.

I don’t think either side is in a rush so will see what happens.

I don’t like the idea of being off the property ladder rfor tiling as prices are only going up.

Likewise, the house I’m sitting in now was brought by me off the landlord when I was renting it. And now I’ve just (about) sold it, I can tell you that 1) the business of selling is hard work 2) it’s hard to actually get as much as estate agents valuation unless you have lots of time to wait for a buyer and 3) the business of selling is hard work. Did I mention it’s hard and stressful work?
Just sell to the tenant if the price sounds fair.

In a similar position – our agreement would see us giving practically the same amount to the letting agent if we sold to the tenants as we would give to an estate agent if we sold to anyone else.

This is negotiable though. After all they are getting money for no work and you can threaten to sell via another agent in which case they get zip.

Is it the right size for them? 😛

From your last post, sounds like the question might really be “should I sell my house”. If the answer is yes, then a tenant buyer is great.