Buying a House You're Currently Renting

[Wings5]

Hi All,

I have a friend who is renting a house, but likes it and is thinking about trying to purchase it from the landlord. What is the best way to go about that? Go through the landlord's property manager who originally advertised the home for rent? Go directly to the landlord (they communicate directly on any repairs, etc.)?

For the many landlords on the forum, what would you be looking for if a tenant approached you about purchasing the home?

Thanks for any insight!

-Wings

[MakeSmarterDecisions]

If the tenant has direct contact with the owner, it might save both parties money (if a sale was ever to actually happen) to talk directly. If one of our tenants wanted to purchase a home from us we would definitely discuss it.  It can be a win-win for both parties depending on the situation.

[ender]

Definitely avoid going through a realtor officially. One of the main benefits is that you can not need a realtor.

[KBecks]

Your friend should ask the owner for a price but then also shop around -- there are so many homes out there, why is the one they are renting so special?   

[gbbi_977]

We bought our condo from our landlords after living in it for 18 months. Is the landlord actually interested in selling? Sounds like from your post that there's no indication of that. For us, OTOH, landlord rented it to us 18 months earlier because they were buying a new house and wanted to wait for the market to improve before selling. So we knew their plan was to sell.

We had a great experience, because we were able to deal directly with the landlord (no rental agency to begin with, we rented a different unit in the building before moving into their place so we knew them already as neighbors) so neither side had an agent. We took this into account in the negotiations. Negotiations were done fairly "arms length" in that it was all by phone, with each side presenting an offer or counter-offer and then giving the other side as long as they needed to consider/counter.

Someone asked what's so special about this house? Obviously an important question and you need to do the comps. For us, being very very cautious people, something we may have kind of paid a premium for (I think we paid what the house is worth, but I don't think we got a bargain - it felt win/win if that makes sense) was the chance to "Try before you buy" which is quite rare...it made us feel more confident/emotionally secure when we were deciding how high we were willing to go.

We like being able to call the former owners to ask "where did this shelving come from" or "do you know the paint color in the bedroom" but obviously those aren't things it's worth taking a financial hit for...