Author Topic: Tips on making an offer to landlord  (Read 2198 times)

ReP

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Tips on making an offer to landlord
« on: August 03, 2016, 10:42:40 AM »
We live in an incredibly competitive market (Bellevue, WA). We are thinking of making an offer on our house to the landlord to reduce competition.

Any tips on how to make the offer as juicy as possible (besides a fair price and cutting out real estate agents obviously). I know there can be tax incentives, etc. for landlords with different payment arrangements (traditional purchase versus land-lease contracts or something?) I'm not sure which terms to start researching.

Thanks all.

therethere

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Re: Tips on making an offer to landlord
« Reply #1 on: August 03, 2016, 10:56:03 AM »
Posting to follow. I've been toying with this idea for the past 2 years. Though I don't know if I could stomach knowing that on top of paying him rent for the past 5 years we'd also be paying the 100k+ appreciation to our landlord. 

zephyr911

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Re: Tips on making an offer to landlord
« Reply #2 on: August 03, 2016, 10:57:33 AM »
Posting to follow. I've been toying with this idea for the past 2 years. Though I don't know if I could stomach knowing that on top of paying him rent for the past 5 years we'd also be paying the 100k+ appreciation to our landlord.
The difference between that and what you'd be paying to any other home seller is entirely psychological.

therethere

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Re: Tips on making an offer to landlord
« Reply #3 on: August 03, 2016, 11:02:56 AM »
Just because its psychological doesn't make it go away! It would be easier to separate the feelings if they were two different parties I think. Is it logical? No of course not. 

One question I've always had is if you were to do this is would you do a home inspection on the sly beforehand? Its only a few hundred dollars right? Or would you wait until after an initial offer like a typical home sale.

sokoloff

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Re: Tips on making an offer to landlord
« Reply #4 on: August 03, 2016, 04:30:24 PM »
I see no real upside to doing a home inspection on the sly. Only upside is if you were willing to write a "financing contingency only" or "no contingency" offer as additional incentive. Even there, I'd only do it if you knew they were thinking of (or open to) selling.

Maybe your landlord doesn't want to sell at all. You're out a home inspection for a deal that had zero chance of happening. Maybe they're open to selling but out of touch with the market; same story...

therethere

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Re: Tips on making an offer to landlord
« Reply #5 on: August 04, 2016, 07:59:58 AM »
I guess I was thinking that after living there for a few years I know some things wrong and the shortcomings of the house (old windows, soon to fail sewer line, incredibly inefficient heating and insulation, etc). Having an inspection completed would corroborate with any large difference in price from what he thinks the condition of the house is in. I guess I'm in an odd situation. Booming area with out of state landlord who seems to be semi-oblivious to the local market. I would want to have all my ducks in a row before even bringing up the thought of selling. I'm sure once the thought was brought up they'd  do research and get very excited about the potential appreciation. If we presented a low offer without anything to back it up I'm afraid they'd put it directly onto the open market to get more money. Then we get pushed out as renters and there is nothing comparable in the area to move into. See the issue? Bringing up the idea of selling the house also brings up the potential for the house to go on the market. That's one of the main reasons I've never taken it past the brainstorming phase.

CowboyAndIndian

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Re: Tips on making an offer to landlord
« Reply #6 on: August 04, 2016, 08:09:51 AM »
I just sold my rental to my tenant  for about 7% less than the market rate.

I sold it for less than the market rate for the following reasons
  • I knew that it needed some work (upgrades and fixes) costing about 1-2% of the market rate
  • During fixes/upgrades, I would not be collecting rent money
  • I did not pay realtor fees (Approx 5-6%)

So, it was a win-win situation. The tenant got the property at 7% less than market value. As for me, it got me more than if I had sold it on the market.

So, go ahead and craft a win-win proposal. You have lived in the house and know its shortcomings.
Both of you could come out ahead by avoiding the realtors.

zephyr911

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Re: Tips on making an offer to landlord
« Reply #7 on: August 04, 2016, 02:01:31 PM »
So, it was a win-win situation. The tenant got the property at 7% less than market value. As for me, it got me more than if I had sold it on the market.

I'm thinking about offering my old townhouse to the tenants for the value on the (VA) loan. It's probably in the ballpark of your scenario... a win for both.

Blindsquirrel

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Re: Tips on making an offer to landlord
« Reply #8 on: August 07, 2016, 10:07:33 PM »
 Make the offer fair but as is where is, pre approved or cash for financing and no BS at all for landlord is your best bet. Landlord is already making money off the property and may have no interest at all in selling. I have received lowball offers to buy places I rent and have said, eh, no thanks. I have sold houses to tenants where they get a good deal, I get a good deal and it went very smoothly. If landlord bought the place on a 1031 exchange, they may never sell. It costs nothing to make an offer.

dpfromva

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Re: Tips on making an offer to landlord
« Reply #9 on: August 08, 2016, 01:21:38 PM »
Consider rent to own agreement as Plan B. Lots of upside for landlord but if you perform on the contract, the place is yours.

Landlady

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Re: Tips on making an offer to landlord
« Reply #10 on: August 08, 2016, 05:20:23 PM »
From a landlord's perspective if my tenants made me a fair market offer (provide comps) without an agent with no requests to fix or clean anything that'd be a juicy offer for me.

bpleshek

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Re: Tips on making an offer to landlord
« Reply #11 on: August 10, 2016, 11:42:52 AM »
I would consider a fair market offer wish some savings on fees.  With my equity, i might be able to get two properties in its place.  Since you make your money when you buy the house and only realize the profits when you sell it, I might be inclined to do so seeing that I already bought the property at 70%-75% value.

Brian