Tenant very keen to buy but keep saying not just yet!

by Readers Question

11:17 AM, 5th May 2015
About 4 years ago

Tenant very keen to buy but keep saying not just yet!

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Tenant very keen to buy but keep saying not just yet!

We have been letting a 4 bedroom house to the same family for the past 4 years and they are good tenants. During the last 18 months they have stated on a number of occasions that they definitely want to buy the property as they cannot find anything more suitable.

For our part we need to sell the property by spring 2016 and we are happy to sell to them. In January this year they categorically stated they would be able to release money from their business so enabling them to purchase this spring.

However they recently informed us that their business is going through a cash flow problem and need to delay the purchase. They still definitely want to buy and now expect to raise the money this year but they also state they are continuing to look at other properties!

We can give them more time but we are wondering if there is any way to lock them into the purchase since we do not want to end up running the risk of not selling the property by next spring.

Georgebasket



Comments

Graham Bowcock

12:10 PM, 5th May 2015
About 4 years ago

George

I think, as is often the case in such discussions on this forum, that you need to look at what you want to achieve, not what your tenant wants to achieve. Do you want to sell the house? If so do you mind when? Is Spring 2016 your ultimate deadline? Are you looking for full vacant possession (market) value?

If you want to sell then you should be in the driving seat. You could after all obtain VP and sell to whoever you choose - presumably the person who pays you the most! What is the driver for you to sell to the tenant - just because they are nice people?

I have had a tenant on a house for 16 years who would like to buy. She never will because she can't afford it. I don't mind as I don't want (or have) to sell it so as long as she keeps paying me the proper rent I'm happy for her to have her dream.

Sales to tenants are rare because most seek some discount (I'm a sitting tenant so I get a reduction - nonsense). I have only done it once where I knew the tenant was waiting for money from her divorce and the letting was temporary.

If you still want to go ahead then, like all good advice on here, do it properly. Set out the terms (your terms) with timescales in writing and make sure the tenants know you are serious and professional.

Neil Robb

20:14 PM, 9th May 2015
About 4 years ago

Hi I have just been through the same we love the house and neighbours we want to buy. The same as you then three weeks back we have bought some were else we are moving before the end of the month.

I would serve the notice that you want your property back to sell. This will make them act if they are serious about buying or just stringing you along until they get some where else.

You said they had been looking at other properties why if they have cash flow problems.

My tenants were great looked after the property paid the rent on time, but don't let them decide when you want to change your life.

Colin McNulty

13:08 PM, 12th May 2015
About 4 years ago

You could offer them an Exchange with Delayed Completion contract, it's basically the normal sales process, but instead of exchanging and completing within the normal 2 weeks, you could exchange and give them 9 months to find the money to complete the purchase. The deposit you take on exchange doesn't have to be the normal 10%, that's just a convention.

This approach locks them into the purchase with legally binding financial consequences if they don't complete in time. So you get certainty, they get certainty and they get a definite deadline to work to.

George Garner

13:30 PM, 21st May 2015
About 4 years ago

Thank you for all for responding, the thoughts and suggestions are very useful. It's now time for me to take action!


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